The Conservatism Principle

question 109

Multiple Choice

The conservatism principle

• A) is primarily concerned with correctly valuing a business's assets.
• B) matches assets and liabilities.
• C) requires accountants to choose the accounting treatment that minimizes net income.
• D) is concerned with matching expenses with revenues.

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Definitions:

Supplying Service

The act of providing a service to customers, clients, or inside an organization as opposed to delivering a tangible product.

Cost

The amount of money or resources expended to acquire an asset, service, or achieve a specific objective.

Cash

Money in the form of currency, which includes bills and coins, that can be used to purchase goods and services.

Joint Operation

A business activity where two or more parties share control and management responsibilities, resources, and risks to achieve mutual economic activities.