The Full Disclosure Principle Says That If a Change Is

question 118

Multiple Choice

The full disclosure principle says that if a change is made to the inventory valuation method, the company should:

• A) disclose the change.
• B) show the effects of the change on profit and inventory valuation.
• C) show justification for the change in a footnote on the financial reports.
• D) All of these answers are correct.

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Definitions:

Foreign Producers

Companies or individuals that manufacture or provide services in one country for consumption in another country.

Domestic Producers

Local or national firms and individuals that produce goods and services within a country.

Free Trade

The absence of tariffs, duties, or trade barriers between countries, allowing for the unrestricted exchange of goods and services.

Sold Quantity

The total number of units of a product sold within a specific time period.