Which of the Following States That a Business Must Report

question 1

Multiple Choice

Which of the following states that a business must report enough information for outsiders to make knowledgeable decisions about the company?

• A) Accounting conservatism
• B) Materiality concept
• C) Disclosure principle
• D) Consistency principle

---

Definitions:

Activity Depreciation Method

A method of calculating the depreciation of an asset based on its usage, activities, or units of production rather than the passage of time.

Depreciation Expense

The allocated reduction in the carrying amount of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or other declines in value.

Estimated Life

The anticipated duration for which an asset is expected to be functional and economically viable, dictating its depreciation schedule.

Group Depreciation

A depreciation strategy applied to a collection of assets that have similar characteristics and useful lives, simplifying the process of calculating depreciation expenses.