The Conservatism Constraint Prescribes That

question 219

Multiple Choice

The conservatism constraint prescribes that:

• A) All items of a material nature are included in financial statements.
• B) When multiple estimates of amounts to be received or paid in the future are equally likely, then the least optimistic amount should be used.
• C) A company use the same accounting methods period after period.
• D) Revenues and expenses are reported in the period in which they are earned or incurred.
• E) All inventory items are reported at full cost.

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