An Account Principles Board Opinion Was Concerned with Disclosure of Accounting

question 30

Multiple Choice

An Account Principles Board Opinion was concerned with disclosure of accounting policies.A singular feature of this particular opinion is that it

• A)Calls for disclosure of every accounting policy followed by a reporting entity
• B)Applies to immaterial items whereas most opinions are concerned solely with material items
• C)Applies also to accounting policy disclosures by not-for-profit entities,whereas most opinions are concerned solely with accounting practices of profit-oriented entities
• D)Prescribes a rigid format for the disclosure of policies to be reported upon

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Definitions:

Coase Theorem

A principle that asserts that when trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property.

Government Intervention

The involvement of the government in the market, aiming to alter the allocation of resources and distribution of goods and services.

Efficient Outcome

An economic situation in which all resources are allocated in the most effective way possible, maximizing potential benefit.

Negative Externality

A negative effect or cost suffered by a third party due to an economic transaction they were not involved in.