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.

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Definitions:

Global Partners

International entities or countries that collaborate on joint ventures, projects, or initiatives for mutual benefit.

Marketing Approach

The strategies and tactics a business adopts to promote, sell, and distribute its products or services.

Standardization

The process of implementing and developing technical standards to make the output of different producers compatible and uniform.

Firm's Marketing

The set of activities and strategies a business uses to promote its products or services to its target customers.