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)Recording a lower amount for bad debt expense.
D)Taking an asset write-down early.

Question

Quizplus · Accepted Answer

Taking an asset write-down early is considered a conservative accounting practice because it involves recognizing potential losses sooner rather than later, which reflects a more cautious approach to financial reporting. This practice aims to present a company's financial situation more conservatively, ensuring that assets are not overstated on the balance sheet.

Which of the Following Is a Conservative Accounting Practice