Which of the following accounting conventions would an accountant most likely apply when facing major uncertainties?
A)Understandability
B)Conservatism
C)Materiality
D)Verifiability

Question

Quizplus · Accepted Answer

When facing major uncertainties, an accountant would most likely apply conservatism convention, which requires accountants to anticipate possible losses but not gains. This means that they should choose the alternatives that will be less optimistic and less likely to overstate assets and income. This approach ensures that financial statements are not overstated, and the financial position and performance of the entity are portrayed more accurately.

Which of the Following Accounting Conventions Would an Accountant Most