The full disclosure principle requires a balance between:
A) Comparability and consistency.
B) Relevance and cost-effectiveness.
C) Reliability and neutrality.
D) Timeliness and predictive value.

Question

Quizplus · Accepted Answer

The full disclosure principle requires that financial statements provide all information that could affect a reader's understanding of those statements. However, this also needs to be balanced with cost-effectiveness. Simply put, it's not always practical or cost-efficient to include every single detail in financial statements. Therefore, the answer is B, which represents the balance between relevance and cost-effectiveness.

The Full Disclosure Principle Requires a Balance Between