The financial statements in the annual report of a corporation contain footnotes explaining the methods used to depreciate the firm's equipment.This practice is an example of
A) the consistency principle.
B) the conservatism constraint.
C) the full disclosure principle.
D) the accrual principle.

Question

Quizplus · Accepted Answer

The financial statements in the annual report of a corporation contain footnotes explaining the methods used to depreciate the firm's equipment, which is an example of the full disclosure principle. The full disclosure principle requires that all material information that could potentially impact a user's decision-making be disclosed in the financial statements.

The Financial Statements in the Annual Report of a Corporation