The Disclosure of Accounting Policies, Is Important to Financial Statement

question 4

Multiple Choice

The disclosure of accounting policies, is important to financial statement readers in determining

• A)net income for the year.
• B)whether accounting policies are consistently applied from year to year.
• C)the value of obsolete items included in ending inventory.
• D)whether the working capital position is adequate for future operations.

Understand the components and structure of master budgets.

Calculate cash collections from credit sales.

Determine the cost of goods sold and merchandise purchases.

Calculate expected cash disbursements.

---

Definitions:

Reprimand

A formal expression of disapproval or correction, often by a person in authority, towards an individual's behavior or performance.

Expectancy Model

A psychological theory stating that motivation is determined by an individual's expected outcomes or rewards following certain behaviors.

Second-level Outcome

The indirect or subsequent effects or results that follow the immediate consequences of an action or decision.

Equity Theory

A theory in social psychology that explains how individuals perceive fairness in distribution of resources and treatment in social exchanges.