Significant accounting policies are described in the notes to the financial statements because:

Question

Quizplus · Accepted Answer

Significant accounting policies must be disclosed in the notes to the financial statements to inform the reader about the specific accounting principles or practices used to prepare the financial statements. This provides transparency and comparability among companies that may use different accounting practices. Additionally, it helps the reader to understand the impact of the accounting policies on the financial statements and evaluate the significance of the reported amounts. The other options are not accurate as there is usually enough space to include significant accounting policies in the financial statements, and matching of revenues and expenses is a fundamental principle of the accrual basis of accounting.

Significant Accounting Policies Are Described in the Notes to the Financial