Which of the following is a conservative accounting practice?
A)Change from double-declining balance to straight-line depreciation.
B)Record sales revenue before it is actually earned.
C)Adjust the allowance for uncollectible accounts to a larger amount.
D)Record inventory at market rather than lower of cost or market.

Question

Quizplus · Accepted Answer

Conservative accounting practices involve recognizing potential losses or expenses earlier and delaying the recognition of revenues or gains. Adjusting the allowance for uncollectible accounts to a larger amount is conservative because it anticipates potential future losses from uncollectible accounts.

Which of the Following Is a Conservative Accounting Practice