The basic accounting concept that refers to the tendency of accountants to resolve uncertainty in favor of understating assets and revenues and overstating liabilities and expenses is known as the
A)conservatism constraint.
B)materiality constraint.
C)substance over form principle.
D)industry practices constraint.

Question

Quizplus · Accepted Answer

The concept described in the question is the conservatism constraint, which requires accountants to err on the side of caution and avoid overstating financial performance, thus leading to understating assets and revenues and overstating liabilities and expenses. This helps to prevent overstatement of financial strength and to promote transparency and accuracy in financial reporting. The other options do not accurately describe the concept in question.

The Basic Accounting Concept That Refers to the Tendency of Accountants