Which Accounting Assumption or Principle Is Being Violated If a Company

question 121

Multiple Choice

Which accounting assumption or principle is being violated if a company is a party to major litigation that it may lose and decides not to include the information in the financial statements because it may have a negative impact on the company's share price?

• A) Full disclosure.
• B) Going concern.
• C) Historical cost.
• D) Expense recognition.

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Definitions:

Determine Methods

The process of deciding or establishing the means by which a goal will be achieved.

Eye Contact

Direct visual engagement with the eyes of another person, often used to communicate confidence, attention, and interest.

Enunciation

The act of pronouncing words clearly and distinctly.

Credible Speaker

An individual who is considered trustworthy and authoritative, making their spoken messages more convincing and acceptable to the audience.