The concept of adequate disclosure requires a company to inform financial statement users of each of the following,except:
A)The accounting methods in use.
B)The due dates of major liabilities.
C)Destruction of a large portion of the company's inventory on January 20,three weeks after the balance sheet date,but prior to issuance of the financial statements.
D)Income projections for the next five years based upon anticipated market share of a new product;the new product was introduced a few days before the balance sheet date.

Question

Quizplus · Accepted Answer

Adequate disclosure requires that companies provide information that is relevant and material to the financial statements. Income projections for the next five years based on anticipated market share of a new product may not be material or relevant to the financial statements and therefore may not need to be disclosed. However, the other choices (A, B, and C) are examples of information that should be disclosed to financial statement users.

The Concept of Adequate Disclosure Requires a Company to Inform