a. A business should report the least favorable figures in the financial statements when two or more possible options are presented. 1. Conservatism 2. Materiality concept b. A business's financial statements must report enough information for outsiders to make knowledgeable decisions about the company. 3. Disclosure principle 4. Consistency principle c. A business should use the same accounting methods and procedures from period to period. d. A company must perform strictly proper accounting only for items that are significant to the business's financial situation.
a. A business should report the least favorable figures in the financial statements when two or more possible options are presented. 1. Conservatism 2. Materiality concept b. A business's financial statements must report enough information for outsiders to make knowledgeable decisions about the company. 3. Disclosure principle 4. Consistency principle c. A business should use the same accounting methods and procedures from period to period. d. A company must perform strictly proper accounting only for items that are significant to the business's financial situation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Match the accounting terminology to the definitions.
1. Conservatism
a. A business should report the least favorable figures in the financial statements when two or
more possible options are presented.
2. Materiality concept
b. A business's financial statements must report enough information for outsiders to make
knowledgeable decisions about the company.
3. Disclosure principle
4. Consistency principle
c. A business should use the same accounting methods and procedures from period to period.
d. A company must perform strictly proper accounting only for items that are significant to
the business's financial situation.
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