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Financial information that may impact investors' and creditors' decisions is referred to as _________________ and must be reported under GAAP.

a) Balance sheet
b) Income statement
c) Materiality threshold
d) Material information

1 Answer

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Final answer:

The financial information that impacts decisions made by investors and creditors is known as material information and is required to be reported under GAAP.

Step-by-step explanation:

Financial information that may impact investors' and creditors' decisions is referred to as material information and must be reported under GAAP (Generally Accepted Accounting Principles). The concept of materiality plays a critical role in financial reporting and accounting; it dictates that all material information that could influence the economic decisions of users should be included in financial statements. When something is considered material, it means its omission or misstatement could alter the economic decisions of users taken on the basis of the financial statements.

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