The Full Disclosure Principle

question 36

Multiple Choice

The full disclosure principle

• A) Requires that when a change in inventory cost flow assumption is made, the notes to the statements report the type of change
• B) Requires that when a change in inventory cost flow assumption is made, the notes to the statements report the justification for the change
• C) Requires that any change in net income due to changes in the inventory cost assumption be disclosed
• D) Does not require a company to use one cost flow assumption exclusively
• E) All of the above

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Definitions:

Exchange

The act of giving one thing and receiving another in return, often used in the context of trading goods, services, or currencies.

Production-oriented Era

Refers to a period in business history where the focus was primarily on production efficiency, manufacturing, and product capabilities rather than the needs or desires of customers.

Sales-oriented Era

A period in business history when the main focus of companies was increasing sales, often without regard to customer needs or satisfaction.

Market-oriented Era

The Market-oriented Era is a phase in marketing history characterized by a focus on meeting customers' needs and desires, understanding market demand, and creating value through marketing activities.