Which of the following prescribes the use of the less optimistic amount when more than one estimate of an amount to be received or paid exists and the estimates are about equally likely?
A)Full disclosure principle.
B)Consistency concept.
C)FIFO inventory valuation method.
D)Conservatism constraint.
E)Matching principle.

Question

Quizplus · Accepted Answer

The conservatism constraint prescribes the use of the less optimistic amount when more than one estimate of an amount to be received or paid exists and the estimates are about equally likely. This helps to provide a more cautious approach to financial reporting and ensure that financial statements are not overstated. The other options listed are not relevant to this specific scenario.

Which of the Following Prescribes the Use of the Less