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Accounting Conventions: Full Disclosure Video Lecture | Accountancy Class 11 - Commerce

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FAQs on Accounting Conventions: Full Disclosure Video Lecture - Accountancy Class 11 - Commerce

1. What is the full disclosure accounting convention?
Ans. The full disclosure accounting convention requires companies to provide all relevant information that could impact the financial statements to the users of those statements. This includes both financial and non-financial information that may influence the decision-making process of users.
2. Why is full disclosure important in accounting?
Ans. Full disclosure is important in accounting because it promotes transparency and helps users of financial statements make informed decisions. By providing all relevant information, companies ensure that users have a complete and accurate understanding of the financial position and performance of the business.
3. What types of information should be disclosed under the full disclosure convention?
Ans. Under the full disclosure convention, companies should disclose information such as significant accounting policies, contingent liabilities, related party transactions, changes in accounting methods, and any other information that may impact the financial statements. The specific requirements may vary depending on the accounting standards followed by the company.
4. How does full disclosure benefit investors and creditors?
Ans. Full disclosure benefits investors and creditors by providing them with a comprehensive view of a company's financial position. It enables them to assess the risks and uncertainties associated with investing or lending to a particular company. This information helps in making more informed investment or lending decisions.
5. Are there any legal requirements for full disclosure in accounting?
Ans. Yes, there are legal requirements for full disclosure in accounting. Various accounting standards, regulations, and laws mandate the disclosure of certain information to ensure transparency and accountability. For example, in the United States, the Securities and Exchange Commission (SEC) requires public companies to provide full and fair disclosure of all material information in their financial statements and other filings.
82 videos|105 docs|42 tests

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