During a major renovation project of its head office, a worker was seriously injured. While the company believes that it was not at fault, it does include the incident in the notes to its financial statements. This is consistent with the
A) full disclosure principle.
B) periodicity assumption.
C) going concern assumption.
D) economic entity assumption.

Question

Quizplus · Accepted Answer

The full disclosure principle requires that all material information that could affect financial statement users' decisions should be disclosed. In this case, the serious injury is material information that could affect stakeholders' decisions, and therefore should be disclosed in the financial statements.

During a Major Renovation Project of Its Head Office, a Worker