The ________ principle states that the financial statements of a business must report enough information for outsiders to make knowledgeable decisions about the business.

Question

Quizplus · Accepted Answer

The disclosure principle requires companies to disclose all relevant and necessary information in their financial statements to ensure that outsiders can make informed decisions based on the financial information available. Consistency and historical cost principles are accounting principles that relate to the measurement and recording of transactions, while conservatism is an accounting principle that requires companies to anticipate and recognize losses when they are probable, but not gains until they are certain.

The ________ Principle States That the Financial Statements of a Business