The Conservatism Principle in Accounting Means That a Company Should

question 21

Multiple Choice

The conservatism principle in accounting means that a company should:

• A)use the same accounting methods and procedures from period to period.
• B)report enough information in its financial statements for outsiders to make knowledgeable decisions about the company.
• C)perform strictly proper accounting for items and transactions that are significant to the company's financial statements.
• D)report items in the financial statements at amounts that lead to the most pessimistic immediate financial results.