Classify Each of the Following Accounting Practices as Conservative or Aggressive

question 57

Short Answer

Classify each of the following accounting practices as conservative or aggressive:
1. Increase the allowance for uncollectible accounts.
2. When costs are rising, change from FIFO to LIFO.
3. Increase the estimated useful life of equipment.

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Definitions:

Adrenal Glands

Small glands located above the kidneys that produce hormones like adrenaline and cortisol, which help regulate metabolism, immune system, blood pressure, response to stress, and other essential functions.

More Cortisol

An increase in the level of cortisol, a stress hormone produced by the adrenal glands, which can affect various bodily functions.

General Adaptation Syndrome

A three-stage response (alarm, resistance, exhaustion) that the body goes through when exposed to prolonged stress, according to Hans Selye.

Resistance Stage

The second phase of the general adaptation syndrome, where the body adapts to a stressor with increased resistance, but at a high cost to physical and mental resources.