The Conservatism Constraint Prescribes That

question 21

Multiple Choice

The conservatism constraint prescribes that:

• A)When multiple estimates of amounts to be received or paid in the future are equally likely,then the least optimistic amount should be used.
• B)A company use the same accounting methods period after period.
• C)Revenues and expenses are reported in the period in which they are earned or incurred.
• D)All items of a material nature are included in financial statements.
• E)All inventory items are reported at full cost.

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Definitions:

Mental Deficiency

A term historically used to describe a range of intellectual disabilities or cognitive impairments.

Physical Disability

Physical Disability is a condition that significantly impairs an individual's ability to perform daily tasks or movements due to physical limitations.

Contributory Negligence

A legal doctrine where a plaintiff's action may reduce or eliminate their right to recover damages if their own negligence contributed to the harm.

Last Clear Chance Doctrine

A legal principle that allows the plaintiff in a negligence case to recover damages even if partly at fault, if the defendant had the final opportunity to avoid the accident.