The Full Disclosure Principle, as Adopted by the Accounting Profession

question 22

Multiple Choice

The full disclosure principle, as adopted by the accounting profession, is best described by which of the following?

• A)All information related to an entity's business and operating objectives is required to be disclosed in the financial statements.
• B)Information about each account balance appearing in the financial statements is to be included in the notes to the financial statements.
• C)Enough information should be disclosed in the financial statements so a person wishing to invest in the shares of the company can make a profitable decision.
• D)Disclosure of any financial facts significant enough to influence the judgment of an informed reader.

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Definitions:

Insurance Company

A business that provides coverage, in the form of compensation resulting from loss, damages, injury, treatment, or hardship in exchange for premium payments.

Key Account Management

A strategic business approach focusing on building and maintaining strong relationships with a company's most important customers.

Team Selling

A sales strategy where a group of company representatives work together to sell a product or service, leveraging their combined expertise.

Mutually Beneficial

A situation or agreement in which all parties involved gain benefits, fostering a cooperative and advantageous relationship.