Applying the lower-of-cost-or-market rule follows which of the following accounting conventions?
A) Full disclosure
B) Consistency
C) Cost-benefit
D) Conservatism

Question

Quizplus · Accepted Answer

The lower-of-cost-or-market rule is based on the accounting convention of conservatism, which requires companies to be cautious in recording their financial transactions and to recognize losses and liabilities as soon as possible. This convention is meant to ensure that financial statements do not overestimate assets or income and, instead, provide a more accurate picture of a company's financial health.

Applying the Lower-Of-Cost-Or-Market Rule Follows Which of the Following Accounting