The Accounting Principle That Requires Important Noncash Financing and Investing

question 167

Multiple Choice

The accounting principle that requires important noncash financing and investing activities be reported on the statement of cash flows or in a footnote is the:

• A) Historical cost principle.
• B) Materiality principle.
• C) Full disclosure principle.
• D) Going concern principle.
• E) Business entity principle.

---

Definitions:

Channels of Command

The formal lines of authority and communication in an organization, through which orders and decisions are passed down.

Differentiation

The process of distinguishing or creating differences between objects, concepts, or entities.

Decision-Making

The cognitive process of selecting a course of action among several alternatives, crucial in clinical settings for determining patient care strategies.

Coordination

The organization of the different elements of a complex body or activity so as to enable them to work together effectively.