Which of the following states that a business must report enough information for outsiders to make knowledgeable decisions about the company?

Question

Quizplus · Accepted Answer

The disclosure principle states that a business must report enough information for outsiders to make knowledgeable decisions about the company. This principle ensures that users of financial statements have access to all relevant and important information about the business's financial position, performance, and cash flows. It helps promote transparency, accountability, and reliability in financial reporting. Accounting conservatism is a principle that requires accountants to err on the side of caution in their reporting, while the materiality concept states that a company only needs to disclose information that is relevant and significant to the user's decision-making process. The consistency principle requires a company to use the same accounting methods and practices from period-to-period for comparability purposes.

Which of the Following States That a Business Must Report