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:

Productivity

The rate at which goods or services are produced, especially in relation to the labor, materials, and time used to produce them.

Compensation Structure

The system of pay and benefits used by an organization to reward its employees.

Prestigious

Describes something esteemed or honored, often associated with high status or quality.

Dangerous

Refers to something that is likely to cause harm or poses a risk to safety.