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:

Without Recourse

A term indicating that the holder of a financial instrument cannot demand payment from the original issuer in case of default.

Endorse

To give support or public approval to someone or something, often used in the context of endorsing products, services, or candidates.

Negotiable Instruments

Written documents guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payee's name written on the document.

Notice

A formal communication or declaration given by one party to another, often required by law or agreement, to inform or warn of actions taken or impending.