The Conservatism Constraint

question 194

Multiple Choice

The conservatism constraint:

• A) Prescribes that when multiple estimates of amounts to be received or paid in the future are equally likely, then the least optimistic amount should be used.
• B) Prescribes that a company use the same accounting methods period after period.
• C) Prescribes that revenues and expenses be reported in the period in which they are earned or incurred.
• D) Prescribes that all items of a material nature be included in financial statements.
• E) Prescribes that all inventory items be reported at full cost.

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Definitions:

Own Deadlines

Self-imposed timelines or due dates for personal projects or tasks, aimed at increasing productivity and time management.

Assigned Deadlines

Specified dates and times by which tasks, projects, or assignments must be completed.

Firm Deadlines

Fixed and non-negotiable deadlines that must be met without any scope for delay or extension.

Flexibility

The ability to easily adapt to new, different, or changing requirements and situations.