Application of the full disclosure principle
A)is theoretically desirable but not practical because the costs of complete disclosure exceed the benefits.
B)is violated when important financial information is buried in the notes to the financial statements.
C)is demonstrated by the use of supplementary information presenting the effects of changing prices.
D)requires that the financial statements be consistent and comparable.

Question

Quizplus · Accepted Answer

The full disclosure principle is demonstrated by the use of supplementary information presenting the effects of changing prices. This principle requires companies to disclose all relevant and material information in their financial statements and supplementary information. While complete disclosure may be expensive, it is essential to make informed decisions about a company's financial health. Violating this principle by burying important financial information in the notes to the financial statements can lead to legal and ethical problems. Consistency and comparability are requirements of the consistency principle.

Application of the Full Disclosure Principle