In the Notes to Financial Statements, Adequate Disclosure Would Typically

question 4

Multiple Choice

In the notes to financial statements, adequate disclosure would typically not include:

• A) The accounting methods in use.
• B) Lawsuits pending against the business.
• C) Due dates of major liabilities.
• D) The optimism of the CFO regarding future profits.

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Definitions:

Deficit

The shortfall that occurs when expenses exceed income or revenues.

IFRS

International Financial Reporting Standards, a set of accounting standards for financial reporting that is accepted globally.

Statement of Changes

A financial document that outlines the reasons for changes in equity, including transactions with owners and comprehensive income, over a period.

Retained Earnings

The portion of net earnings not paid out as dividends, but retained by the company to be reinvested in its core business or to pay debt.