Expensing a building in the year of purchase represents an abuse of which of the following accounting conventions?
A)Full disclosure
B)Cost-benefit
C)Conservatism
D)Consistency

Question

Quizplus · Accepted Answer

Expensing a building in the year of purchase violates the conservatism convention, which states that accountants should err on the side of caution and not overstate assets or income. By expensing the cost of the building in the year of purchase, the company is understating its assets and income, which violates the conservatism convention.

Expensing a Building in the Year of Purchase Represents an Abuse