Preparation of financial statements with adequate notes is primarily based on the:
A) separate entity assumption.
B) full-disclosure principle.
C) cost principle.
D) cost/benefit constraint.
E) reliability quality.

Question

Quizplus · Accepted Answer

The full-disclosure principle requires that financial statements include all information necessary for users to understand the financial position and performance of the entity. This includes notes that provide additional details and explanations for items reported in the financial statements. The other options do not directly relate to the preparation of financial statements with adequate notes.

Preparation of Financial Statements with Adequate Notes Is Primarily Based