Notes to financial statement about law suits, contractual commitment etc. are required to be shown in the financial statement by way of footnote or in notes to accounts under which of the following principles?

Disclosure Concept

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Window Dressing

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CA Institutes Requirement

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Consistency Principles

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Solution

The correct option is A 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.

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Similar questions

Which of the following statement is true?

Statement A: Financial statements are prepared on the basis of accounting principles.

Statement B: Any changes in the accounting principles or method will affect the utility of the financial statements.

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