Question

Market value of investments is shown as a footnote in the Balance Sheet according to________________.

• A. Consistency concept
• B. Disclosure concept
• C. Materiality concept
• D. Going concern concept

Answer 1

The correct option is B Disclosure concept

The principle of full disclosure requires that all material and relevant facts concerning financial performance of an enterprise must be fully and completely disclosed in the financial statements and their accompanying footnotes.

This is to enable the users to make correct assessment about the profitability and financial soundness of the enterprise and help them to take informed decisions.

Hence, the market value of investments is shown in the balance sheet as a footnote according to the disclosure concept.