The explanatory notes to the financial statements:
A. should be referred to if more than a cursory, and perhaps misleading impression of a firm's financial position and its results of operations is to be achieved.
B. are not an integral part of the financial statements.
C. are used by many entities to hide information from the reader of the financial statements by including in the explanatory notes information that should be shown in detail on the financial statements themselves
Significant accounting policies are described in the explanatory notes to the financial statements because:
A. there isn't enough space for them to be included in the captions of the financial statements.
B. if the accrual basis of accounting is used, "matching" of revenues and expenses may not take place.
C. the reader must be aware of which of the alternative generally accepted accounting practices have been used.