The Idea Behind the Disclosure Provisions Contained in Federal Securities

question 297

Multiple Choice

The idea behind the disclosure provisions contained in federal securities law is that:

• A) investors will not collect information about securities unless the government makes the information available
• B) the sellers of stock will not disclose financial data without the disclosure requirement
• C) securities are generally overvalued in the absence of such information
• D) all of the other specific choices
• E) none of the other choices

---

Definitions:

Write-off

The accounting action of declaring an asset's value as zero, often due to irrecoverable debts or asset devaluation.

Uncollectible Account

Refers to receivables that a company has deemed impossible to collect, recognizing it as a bad debt expense.

Repayment of Loan

The process of paying back borrowed money to the lender, typically involving periodic payments of principal and interest over a set term.

Accrual Basis

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash is actually received or paid.