71. (p. 549) A company should disclose a commitment made to purchase something in the future in all of the following situations except:
A)if it involves an unusual degree of risk.
B)if it is in the normal course of business.
C)if it involves a significant expenditure.
D)if it commits the entity to issue shares.

Question

71. (p. 549)  A company should disclose a commitment made to purchase something in the future in all of the following situations except:
A)if it involves an unusual degree of risk.
B)if it is in the normal course of business.
C)if it involves a significant expenditure.
D)if it commits the entity to issue shares.

Quizplus · Accepted Answer

A company is generally expected to disclose future purchase commitments that involve unusual risk, significant expenditure, or commitments that involve issuing shares to ensure transparency and inform stakeholders of potential future obligations and impacts on financial health. However, commitments made in the normal course of business are typically not disclosed unless they meet other criteria for disclosure, such as significant value or risk.

71 (P 549) a Company Should Disclose a Commitment Made