Full Disclosure Concept

Q.

'Capital is a liability for the business'.Explain this statement with the principle applied.

Or

Explain the business entity principle with the help of an example.

Q.

The auditor noticed that the financial statements of Meta Company were missing some footnotes important for users for decision making. This action of the management is a violation of:

1. Going Concern Concept

2. Business Entity Concept

3. Full Disclosure concept

4. Materiality Concept

Q.

Which Company’s Shares Are Freely Transferable?

1. Private Company

2. Public Company

3. Both (A) & (B)

4. None Of The Above

Q. A company name Lake Real Estate Ltd. is in the business of Real Estate. It purchased a piece of property by paying a very high price. A few months after the purchase, someone slipped and fell on the property and became seriously injured. The injured party is currently suing Lake Real Estate for negligence. It is probably that LRE will loose the lawsuit. If the principle of Full Disclosure is being correctly followed in the company, which of the following is correct?

1. LRE should disclose the lawsuit in the footnotes & also show a contingent liability for the same
2. LRE should bribe the judge & try to win the case
3. LRE should not disclose it anywhere as it is not a business transaction
4. LRE should not do anything with regard to this

Q. State with reasons whether the following statement is true or false:
Financial statement must disclose all the relevant and reliable information in accordance with the full disclosure principle.

Q. Keeping the records of the business separate from the personal records of the owner of the business is said to be adherence to which accounting principle or concept?

1. Continuing-concern concept
2. Business entity principle
3. Realization principle
4. Objectivity principle

Q. The issue of fraudulent asset valuation is included in _________.

1. ethics in marketing
2. ethics in finance
3. ethics in compliance
4. ethics in production

Q. Contingent liability is shown in the balance sheet because of __________.

1. Convention of adventure
2. Convention of consistency
3. Convention of materiality
4. Convention of disclosure