Which of the Following Describes the Conservatism Constraint

question 109

Multiple Choice

Which of the following describes the conservatism constraint?

• A)A business should avoid overstating assets and revenues and avoid understating expenses and liabilities.
• B)The benefits of accounting for and reporting information should outweigh the costs.
• C)If the dollar amounts involved are large enough to influence a user's decisions the data is considered to be relevant.
• D)The conservatism constraint produces a higher net income and stockholders' equity.

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Definitions:

Conscientiousness

A personality trait characterized by diligence, caution, and a high degree of responsibility.

Organization

The structured arrangement of resources and processes within a project or entity to ensure effective management, coordination, and outcomes.

Autocratic

A leadership style characterized by individual control over all decisions and little input from group members.

Carl Jung

A Swiss psychiatrist and psychoanalyst who founded analytical psychology, known for concepts such as the collective unconscious and archetypes.