Asked by Abbie Mulbarger on Jul 19, 2024
Verified
The full disclosure principle:
A) Prescribes that accounting information is based on actual cost.
B) Provides guidance on when a company must recognize revenue.
C) Prescribes that a company report the details behind financial statements that would impact users' decisions.
D) Prescribes that a company record the expenses it incurred to generate the revenue reported.
E) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.
Full Disclosure Principle
A financial reporting guideline requiring companies to disclose all relevant and necessary information in their financial statements and footnotes to help users make well-informed decisions.
Financial Statements
Official documentation reflecting the monetary transactions and status of a company, individual, or different entity.
- Recognize the consequences of major accounting doctrines, including the measurement (cost) principle, the full disclosure principle, and the materiality constraint.
Verified Answer
JR
Johanathan RobertsJul 25, 2024
Final Answer :
C
Explanation :
The full disclosure principle requires a company to report the details behind financial statements that would impact users' decisions. This includes additional explanations of items presented on the financial statements, as well as any other pertinent information not included in the financial statements.
Learning Objectives
- Recognize the consequences of major accounting doctrines, including the measurement (cost) principle, the full disclosure principle, and the materiality constraint.