2023 · Q64
The practice of appending notes regarding contingent liability in accounting statements is pursuant to:
General Accounting Principles, Auditing and InsuranceRecording transactions
- AConvention of consistency
- BMoney measurement concept
- CConvention of conservatism
- DConvention of full disclosure
Explanation
Contingent liabilities are not recognized in the books but are disclosed as notes to the accounts so that users get complete information. This practice flows from the convention (principle) of full disclosure. It is not about consistency of methods, money measurement, or conservatism (which would over-provide rather than merely disclose). Hence (d).