The Full Disclosure Principle

question 175

Multiple Choice

The full disclosure principle:

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

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Definitions:

Ethical Misconduct

Actions or behavior by an individual or within an organization that violates moral or professional principles.

Lower Entry Levels

Positions or jobs that require minimal professional experience or qualifications, often the starting point of a career path.

Mid-Level Employees

Workers who occupy positions between entry-level and top management, typically responsible for overseeing operational activities and reporting to senior management.

Increasingly Diverse

A term describing environments, populations, or groups that are becoming more varied in terms of cultural, ethnic, gender, or other demographic characteristics.