The accounting principle that guides accountants,when faced with a recognition dilemma,to choose the alternative that produces the lowest net income is referred to as
A)the matching concept.
B)internal control.
C)conservatism.
D)materiality.

Question

Quizplus · Accepted Answer

Conservatism is a principle that guides accountants to be cautious and exercise restraint when making decisions about the recording and recognition of transactions. When faced with a recognition dilemma, they should choose the alternative that produces the lowest net income, which is a conservative approach. This principle helps to ensure that financial statements are more reliable and less likely to overstate income or assets. The matching concept (A) requires that expenses be matched with revenues in the period they are incurred. Internal control (B) is a set of policies and procedures put in place to ensure that financial information is accurate and complete. Materiality (D) refers to the amount or nature of an item that is significant enough to affect a user's decision-making process.

The Accounting Principle That Guides Accountants,when Faced with a Recognition