The Full Disclosure Principle

question 166

Multiple Choice

The full disclosure principle:

• A)Is also called the consistency principle.
• B)Prescribes 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)Prescribes that the notes to the financial statements report when a change in inventory valuation method is made, its justification and its effect on net income.

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Definitions:

Interval Data

Data measured along a scale, in which each point is placed at a specific distance from a reference point, allowing for meaningful comparisons between data points.

Nominal Data

Data categorized into discrete groups or categories that cannot be ordered or ranked with respect to one another.

Ordinal Data

Ordinal data is a type of categorical data with a set order or scale to the possible values, but without a consistent difference between each value.

Quantitative Data

This refers to numerical data that can be measured and quantified, representing quantities, amounts, or levels.