To Meet the Needs of Full Disclosure, Companies Use Supplemental

question 69

Multiple Choice

To meet the needs of full disclosure, companies use supplemental information, including:

• A)Parenthetical comments or modifying comments placed on the face of the financial statements.
• B)Disclosure notes conveying additional insights about company operations, accounting principles, contractual agreements, and pending litigation.
• C)Supplemental financial statements that report more detailed information than is shown in the primary financial statements.
• D)All of these are correct.

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Definitions:

Service Departments

Divisions within a company that support other departments but do not directly contribute to revenue generation, such as maintenance and HR.

Operating Departments

Departments within an organization directly involved in its primary revenue-generating activities.

Expense Allocation

The process of assigning indirect costs to different departments, products, or other segments of a business.