The accounting principle that requires a company to provide financial statement users with information about the accounting methods it has selected (including inventory cost flow methods) is
A) the consistency principle.
B) the conservatism principle.
C) the full disclosure principle.
D) the historical cost principle.

Question

Quizplus · Accepted Answer

The full disclosure principle requires companies to disclose information about their accounting methods, including inventory cost flow methods, to provide financial statement users with a complete understanding of the company's financial position and performance. The consistency principle requires companies to use the same accounting methods from period to period, the conservatism principle requires companies to be cautious in their financial reporting by recording expenses and losses as soon as possible, and the historical cost principle requires companies to record assets at their original cost. However, none of these principles specifically address the disclosure of accounting methods chosen.

The Accounting Principle That Requires a Company to Provide Financial