Which of the Following Is a Conservative Accounting Practice

question 63

Multiple Choice

Which of the following is a conservative accounting practice?

• A)Change from double-declining balance to straight-line depreciation.
• B)Record sales revenue before it is actually earned.
• C)Adjust the allowance for uncollectible accounts to a larger amount.
• D)Record inventory at market rather than lower of cost or market.

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Definitions:

Economic Profits

The surplus remaining after subtracting total costs from total revenues, including both explicit and implicit costs.

Creative Destruction

A concept in economics that refers to the process by which new innovations lead to the demise of old technologies and economic structures, driving economic growth through renewal.

Joseph Schumpeter

Joseph Schumpeter was a 20th-century economist known for his theories on business cycles, innovation, and the concept of "creative destruction."

Alfred Marshall

A prominent British economist known for his significant contributions to the principles of microeconomics.