Coffee Mugs Inc. is aware that a large portion of its receivables may become uncollectible because the customer is in talks for bankruptcy. By choosing not to disclose this information, the information provided in the statements ________.
A) is not verifiable
B) does not faithfully represent the firm's financial position
C) Both A & B
D) Neither A nor B

Question

Quizplus · Accepted Answer

The omission of significant information about potential uncollectible receivables due to a customer's bankruptcy talks means the financial statements do not faithfully represent the firm's financial position, as they lack completeness and neutrality.