Application of the Full Disclosure Principle

question 14

Multiple Choice

Application of the full disclosure principle

• A)is theoretically desirable but not practical because the costs of complete disclosure exceed the benefits.
• B)is violated when important financial information is buried in the notes to the financial statements.
• C)is demonstrated by the use of supplementary information presenting the effects of changing prices.
• D)requires that the financial statements be consistent and comparable.

---

Definitions:

Chapter 7 Petition

a legal process in the United States bankruptcy law allowing individuals or businesses to declare bankruptcy, leading to the liquidation of assets to pay off debts.

Median Income

Median income is the value separating the income distribution of a group into two equal groups: half the members earning less and half earning more than this value.

Bankruptcy Abuse

Activities that exploit the bankruptcy system in a deceitful or fraudulent manner to gain undue advantage or evade debt obligations.

Debtor's Income

The amount of money received by an individual or entity who owes a debt to another party.