question archive Which of the following best describes the additional information that companies use to meet the requirements of full disclosure in financial statements? Question options: Parenthetical comments or modifying comments placed on the face of the financial statements
Which of the following best describes the additional information that companies use to meet the requirements of full disclosure in financial statements? Question options: Parenthetical comments or modifying comments placed on the face of the financial statements
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Which of the following best describes the additional information that companies use to meet the requirements of full disclosure in financial statements?
Question options:
Parenthetical comments or modifying comments placed on the face of the financial statements.
Disclosure notes conveying additional insights about company operations, accounting principles, contractual agreements, and pending litigation.
Supplemental schedules and tables that report more detailed information than is shown in the primary financial statements.
Comments on the face of the financial statements, and schedules, tables, and narrative disclosures in notes to the financial statements.
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Answer is last option- Comments on the face of the financial statements, and schedules, tables, and narrative disclosures in notes to the financial statements
A company presenting its financial statement should make full disclosure in accordance with full disclosure principle. A firm should give the comments on the face of the financial statements, make a reference to the detailed schedules, tables that is available for each financial statements item for example : Schedule for cash and cash equivalents, Schedule for investments etc. It should also give narrative disclosure explaining the material impact on the financial statements. For example: A change in inventory method impact on financial statements, etc. First option is more restricted hence not the answer. Second option has only disclosure notes and not schedules or table. Third option has only schedules and tables and not disclosure notes. Hence answer is last option.
