Which of the Following Is a Conservative Accounting Practice

question 30

Multiple Choice

Which of the following is a conservative accounting practice?

• A)The use of a longer service life for depreciation.
• B)Waiting to record a litigation loss.
• C)Adjust the allowance for uncollectible accounts to a smaller amount.
• D)The write-down of overvalued inventory.

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Definitions:

Mutual Fiduciary Duties

Obligations between parties that require them to act in each other's best interests, often found in relationships like partnerships and between corporate directors and shareholders.

Agents And Principals

A relationship in which one party (the agent) is authorized to act on behalf of another (the principal) in dealings with third parties.

Appointment Of An Agent

The act of designating a person or entity to act on behalf of another, granting them authority to make decisions or perform tasks.

Voidable Contracts

are agreements that may appear legally binding, but can be declared invalid by one of the parties due to factors like misrepresentation, coercion, or lack of capacity.