The Financial Statements in the Annual Report of a Corporation

question 71

Multiple Choice

The financial statements in the annual report of a corporation contain footnotes explaining the methods used to depreciate the firm's equipment. This practice is an example of

• A) the consistency principle.
• B) the conservatism principle.
• C) the full disclosure principle.
• D) the accrual principle.

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Definitions:

Authority

Authority refers to the legal power or right given to an individual or body to make decisions, enforce rules, or control something or someone.

Employer's Organization

A group that represents the interests of employers in various industries.

Ratify

To officially approve or confirm, often used in the context of validating agreements or contracts.

Actual Authority

The power that an agent or representative has been formally given by a principal to conduct specific acts.