Which of the Following Statements Concerning the Principle of Accounting

question 71

Multiple Choice

Which of the following statements concerning the principle of accounting conservatism is true?

• A) According to the GAAP principle of conservatism, financial statements should report expenses and losses in the earliest reasonable year.
• B) The GAAP principle of conservatism tries to prevent the overstatement of book income and the understatement of taxable income.
• C) According to the tax law principle of conservatism, taxpayers should deduct expenses and losses in the earliest reasonable year.
• D) According to the tax law principle of conservatism, taxpayers should deduct expenses and losses in the same year as they are reported on the taxpayers' financial statements.

---

Definitions:

Aggressive Salespeople

Sales professionals who use assertive and often pushy techniques to close deals or secure clients.

Candy Manufacturer

A company that specializes in producing sweets and confections.

Target Market

A specific group of potential customers at whom a company aims its products and services.

Post-it Flag Highlighter

A stationery tool that combines the features of a highlighter and removable page markers for annotating and marking important information in documents.