In matters of doubt and great uncertainty, accounting issues should be resolved by choosing the alternative that has the least favorable effect on net income, assets, and owners' equity.This guidance comes from the
A)materiality constraint.
B)industry practices constraint.
C)conservatism constraint.
D)full disclosure principle.

Question

Quizplus · Accepted Answer

The guidance mentioned in the question refers to the conservatism constraint. This principle suggests that when accounting for uncertain or potentially risky transactions, accountants should be cautious and choose alternatives that have a lower effect on net income, assets, and owners' equity, even if it means understating the financial results. Therefore, the most appropriate choice is option C, conservatism constraint.

In Matters of Doubt and Great Uncertainty, Accounting Issues Should