D is corrent. Disclosure of accounting policies should identify and describe the accounting principles followed by the reporting entity and the methods of applying those principles that materially affect the determination of financial position, cash flow, or results of operations. However, financial statement disclosure of accounting policies should not duplicate details presented elsewhere as part of the financial statements.
In this problem, both (I) management’s intention to vary the dividend payout ratio and (III) the composition of the sales order backlog by segment are not required to be disclosed under Generally Accepted Accounting Principles. As such, these should not be disclosed in a summary of significant accounting policies. An enterprise shall disclose its policy for determining which items are treated as cash equivalents. Thus, the criteria for determining which investments are treated as cash equivalents (II) should be disclosed in a summary of significant accounting policies.
A is incorrect. Disclosure of accounting policies should identify and describe the accounting principles followed by the reporting entity and the methods of applying those principles that materially affect the determination of financial position, cash flow, or results of operations. However, financial statement disclosure of accounting policies should not duplicate details presented elsewhere as part of the financial statements.
In this problem, both (I) management’s intention to vary the dividend payout ratio and (III) the composition of the sales order backlog by segment are not required to be disclosed under Generally Accepted Accounting Principles. As such, these should not be disclosed in a summary of significant accounting policies. An enterprise shall disclose its policy for determining which items are treated as cash equivalents. Thus, the criteria for determining which investments are treated as cash equivalents (II) should be disclosed in a summary of significant accounting policies.
A is incorrect. Disclosure of accounting policies should identify and describe the accounting principles followed by the reporting entity and the methods of applying those principles that materially affect the determination of financial position, cash flow, or results of operations. However, financial statement disclosure of accounting policies should not duplicate details presented elsewhere as part of the financial statements.
In this problem, both (I) management’s intention to vary the dividend payout ratio and (III) the composition of the sales order backlog by segment are not required to be disclosed under Generally Accepted Accounting Principles. As such, these should not be disclosed in a summary of significant accounting policies. An enterprise shall disclose its policy for determining which items are treated as cash equivalents. Thus, the criteria for determining which investments are treated as cash equivalents (II) should be disclosed in a summary of significant accounting policies.
A is incorrect. Disclosure of accounting policies should identify and describe the accounting principles followed by the reporting entity and the methods of applying those principles that materially affect the determination of financial position, cash flow, or results of operations. However, financial statement disclosure of accounting policies should not duplicate details presented elsewhere as part of the financial statements.
In this problem, both (I) management’s intention to vary the dividend payout ratio and (III) the composition of the sales order backlog by segment are not required to be disclosed under Generally Accepted Accounting Principles. As such, these should not be disclosed in a summary of significant accounting policies. An enterprise shall disclose its policy for determining which items are treated as cash equivalents. Thus, the criteria for determining which investments are treated as cash equivalents (II) should be disclosed in a summary of significant accounting policies.
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