Select the Incorrect Statement Regarding the Information Disclosed in Financial

question 135

Multiple Choice

Select the incorrect statement regarding the information disclosed in financial statements.

• A)Financial statements should be detailed enough to answer any financial-related question an investor might have.
• B)Some information disclosed in financial statements may be irrelevant to some users.
• C)The costs of providing all possible information about a firm would be prohibitively high for the business.
• D)When too much information is presented users may suffer from information overloaD.Financial statements can provide only highly summarized economic information. The costs to a company of providing excessively detailed information would be prohibitive. In addition, too much detail leads to information overload, the problem of having so much data that important information becomes obscured by trivial information.

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Definitions:

Economic Profit

The difference between the total revenue generated by a business and the total opportunity costs of all resources used.

Economic Profit

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs, representing excess return over opportunity costs.

Rate of Return

The gain or loss on an investment over a specified time period, expressed as a percentage of the investment's initial cost.

Assets

Items of value owned by individuals, companies, or governments, including tangible items like real estate and equipment, and intangible items like patents and trademarks.