An Accountant Is Uncertain About the Best Estimate of an Amount

question 120

Multiple Choice

An accountant is uncertain about the best estimate of an amount for a business transaction.If two amounts are about equally likely,the amount least likely to overstate assets and income is selected.Which of the following qualities is characterized by this action?

• A)Comparability
• B)Conservatism
• C)Materiality
• D)Neutrality

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Definitions:

Budget Deficit

Occurs when a government's expenditures exceed its revenues during a specific period of time, leading to borrowing or debt accumulation.

Discretionary Fiscal Policy

Government policy that involves adjustable spending and taxation measures to influence the economy, based on current economic conditions.

Monetary Policy

Actions taken by a central bank to control the money supply and interest rates in an economy.

Federal Government Budget

A financial statement presenting the government's proposed revenues and spending for a financial year.