Which Accounting Convention Could Cause an Overload of Information for the Financial

question 37

Multiple Choice

Which accounting convention could cause an overload of information for the financial statement user?

• A)Consistency
• B)Conservatism
• C)Full disclosure
• D)Materiality

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Definitions:

Depreciation Expense

The distribution of a tangible asset's cost throughout its lifespan.

Operating Activities

Business activities related directly to the production and delivery of goods and services.

Net Income

The remaining earnings of a company following the deduction of all expenses and taxes from its total revenue.

Cash Dividends

Payments made by a company to its shareholders from its profits or reserves, representing a share of the corporate earnings.