Which of the following is a conservative accounting practice?
A)The use of a longer service life for depreciation.
B)Waiting to record a litigation loss.
C)Adjust the allowance for uncollectible accounts to a smaller amount.
D)The write-down of overvalued inventory.

Question

Quizplus · Accepted Answer

The write-down of overvalued inventory is a conservative accounting practice as it ensures that the inventory is not overstated on the balance sheet and the financial statements provide a more accurate picture of the company's financial position. The other options could potentially lead to an understatement of expenses or liabilities, which is not conservative.

Which of the Following Is a Conservative Accounting Practice