The Full Disclosure Principle

question 91

Multiple Choice

The full disclosure principle:

• A)Requires that when a change in inventory valuation method is made,the notes to the financial statements report the type of change,why it was made,and its effect on net income.
• B)Requires that companies use the same accounting method for inventory valuation period after period.
• C)Is not subject to the materiality principle.
• D)Is only applied to retailers.
• E)Is also called the consistency principle.

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Definitions:

Just Noticeable Difference

The minimal change in a stimulus that can just barely be detected by the organism.

Difference Threshold

The minimum difference in intensity between two stimuli required for them to be perceived as different 50% of the time.

Selective Attention

The cognitive process of focusing on a particular object or task in the environment while ignoring other irrelevant information.

Sensory Deprivation

The absence of normal levels of sensory stimulation.