Which of the Following Statements Regarding the Information Disclosed in Financial

question 77

Multiple Choice

Which of the following statements regarding the information disclosed in financial statements is not true?

• A)The costs of providing all possible information about a firm would be prohibitively high for the business.
• B)Some information disclosed in financial statements may be irrelevant to some users.
• C)Financial statements should be detailed enough to answer any financial-related question an investor might have.
• D)When too much information is presented users may suffer from information overload.

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Definitions:

Sole Proprietor

A business owned and operated by a single individual, without a legal distinction between the owner and the business.

Separate Legal Entity

A business entity that is legally distinct from its owners, meaning it can own property, incur debts, and be sued in its own name.

Ratification

The action of formally confirming or approving an agreement, treaty, or contract, making it officially valid.

Authority

The legal right or power to make decisions, enforce rules, or command obedience.