Which one of the following statements best describes the concept of materiality?
A. Materiality is determined by reference to specific quantitative guidelines established by the AICPA.
B. Materiality is largely a matter of professional judgment.
C. Materiality depends only on the dollar amount of an item relative to other items in the financial statements.
D. Materiality depends on the nature of an item but not on the dollar amount of the item.
Answer: B
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