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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Which of the following should be disclosed in the Summary of Significant Accounting Policies?

  1. a. rent expense amount
  2. b. maturity dates of long-term debt
  3. c. methods of amortizing intangibles
  4. d. composition of plant assets

To determine

Identify the option that must be disclosed in the summary of significant accounting policies.

Explanation

Additional balance sheet disclosures:

Additional balance sheet disclosure is one of the significant generally accepted accounting principles (GAAP). It states that the users of financial statements must be informed about the required (necessary) information which is essential for interpreting the statements because, it is not possible to report all the relevant information about the financial position of the company directly in the body of the financial statements. Therefore company can provide many “disclosures in the notes accompanying to its financial statements”.

Justification for the incorrect options of a, b and d:

Rent expense amount, maturity of long-term debt and composition of plant assets are not disclosed in the summary of significant accounting policies...

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