0
Why do you think the SEC requires that balance sheets provide two years of comparative financial information and income statements provide three years of comparative financial information?
Wiki User
∙ 10y ago
Income statements contain more data that can be extrapolate and inferred from by investors than the balance sheet does. For more accurate extrapolations, the SEC requires 1 more year of information for the income statement.
Wiki User
∙ 10y ago
Add your answer:
Earn +20 pts
The accounting principle that requires financial statements to report all relevant information about the operations and financial condition of a company is called?
Full Disclosure Principle
Does the full disclosure principle requires that the notes to the financial statements report a change in accounting method for inventory?
The full disclosure principle requires that the notes to the financial statements report a change in accounting method for inventory.
What are the Purpose and objectives in financial statement?
The main objective of financial statements is to provide relevant and reliable information about the financial performance and position of an entity to a wide range of users to assist them in forming their economic decisions. For example, investors require financial statements to judge the profitability of their investments. Lenders require them to assess the credit worthiness of potential clients. Management requires financial statements to manage the affairs of the company in the interest of shareholders. Government may require financial statements to assess the accuracy of tax returns.
Does the SEC requires that publicly owned corporations submit financial statements to it each year?
yes
Which accounting rule requires that a degree of caution should be applied when preparing financial statements under conditions of uncertainty?
Reliability
Which accounting principle requires keeping personal information separate from the financial information of business?
Entity Concept
What is the rule that requires financial statements to reflect the assumption that a business will keep operating instead of being closed or sold?
Going concern assumption
What rules requires transmitting financial institutions to pass along information regarding the transmittal to the next financial institution?
Travel Rule
In general terms what does a set of financial statement describe?
Financial Statements could be of a individual or a company/business.Personal Financial statement would give all the personal financial information of the individual, for ex. his years income, sources of his income, his expenses, things he spent on, etc.A company's or business's financial statement would give you the complete idea of the company including the income of the company, the expenses, the amount of money spent on labor, gross profit of the company, net profit, etc.Financial Statements are something that are used by any company requires to check your credit, for ex. you going to buy a car/house, etc.
Which accounting principle requires that transaction should be recorded in the period they occurred?
There is no one accounting principle that requires that a transaction be recorded in the period it occurs (commonly referred to as accrual basis accounting). There is a conceptual statement that the Financial Accounting Standard Board has issued with regard to the use of accrual accounting. The Financial Accounting Standards Board has issued STATEMENT OF FINANCIAL ACCOUNTING CONCEPTS NO. 6: ELEMENTS OF FINANCIAL STATEMENTS which states in paragraph 134: Items that qualify under the definitions of elements of financial statements and that meet criteria for recognition and measurement are accounted for and included in financial statements by the use of accrual accounting procedures. The basis of accounting, whether cash basis or accrual, should be disclosed in the notes to the financial statements so that the financial statement reader is aware which method of accounting is in use. Generally accepted accounting principles (GAAP) does require the accrual basis of accounting; nevertheless, businesses can present their financial statements on a cash basis as long as proper disclosures are made. The financial statement opinion rendered by the external audit firm would also disclose that the cash basis of accounting is being used.
What does the Securities Exchange Act require public companies to do?
The act requires publicly held companies to file annual audited financial statements (on Form 10-K) with the SEC.
How did the Sarbanesws-Oxley Act become necessary?
Some companies were not truthfully presenting their financial statements. This intentionally mislead investors and lenders, leading to losses by them. The Act requires company officers to personally swear that the numbers were reported accurately and requires the company to put in place procedures and controls that assure accurate financial reporting.
