Question

The disclosure principle requires that management prepare financial reports that disclose all of the following types of information except:

a) the method of inventory costing used
b) forecasts of expected future earnings to help investors decide whether to invest in the company
c) information that is relevant to decision making
d) information that facilitates comparison with other companies' financial reports

Answer 1

The disclosure principle requires management to provide certain information in financial reports, but excludes forecasts of future earnings to help investors decide whether to invest in the company. Option b

Step-by-step explanation:

The disclosure principle requires that management prepare financial reports that disclose all types of information except forecasts of expected future earnings to help investors decide whether to invest in the company.

The purpose of financial reports is to provide relevant information that is useful for decision-making and facilitates comparison with other companies' financial reports. The method of inventory costing used is also required to be disclosed under the disclosure principle. Option b