Uncertainty and risks inherent in business situations should be adequately considered in financial reporting. This statement is an example of the concept of
A) Conservatism
B) Completeness
C) Neutrality
D) Representational faithfulness

Question

Quizplus · Accepted Answer

The statement mentions "uncertainty and risks," which suggests that the concept of conservatism is being referred to. Conservatism in financial reporting requires that uncertainties and risks be adequately considered, and that potential losses be recognized before potential gains.

Uncertainty and Risks Inherent in Business Situations Should Be Adequately