The basic accounting concept that refers to the tendency of accountants to resolve uncertainty in favor of understating assets and revenues and overstating liabilities and expenses is known as
A) prudence or conservatism.
B) the materiality concept.
C) the substance over form principle.
D) the industry practices concept.

Question

Quizplus · Accepted Answer

This basic accounting concept is known as prudence or conservatism, where accountants tend to err on the side of caution and understate assets and revenues and overstate liabilities and expenses to provide a more conservative view of a company's financial position. This ensures that financial statements are more reliable and reduces the risk of overstatement or misrepresentation of financial performance.

The Basic Accounting Concept That Refers to the Tendency of Accountants