The Accounting Principle That Requires Financial Statements (Including Notes) to Report

question 92

Multiple Choice

The accounting principle that requires financial statements (including notes) to report all relevant information about the operations and financial condition of a company is called:

• A) Relevance.
• B) Full disclosure.
• C) Evaluation.
• D) Materiality.
• E) Matching.

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Definitions:

Personally Relevant

Pertaining directly to or having a direct impact on an individual's personal life, interests, or situations.

Working Memory

A cognitive system responsible for temporarily holding information available for processing.

Chunks

In cognitive psychology, chunks refer to units of information grouped together and stored in the memory for easier recall.

Magic Number

Often referencing Miller's law, which suggests the number 7 (plus or minus 2) represents the amount of information a typical human memory can hold in the short term.