Under ASPE, the characteristic which ensures that when preparing financial statements, accountants should choose the accounting treatment or estimate that will be least likely to overstate assets, revenues and gains and the least likely to understate liabilities, expenses and losses is
A) conservatism.
B) understandability.
C) comparability.
D) relevance.

Question

Quizplus · Accepted Answer

Conservatism under ASPE (Accounting Standards for Private Enterprises) guides accountants to choose accounting methods that are cautious, aiming to minimize the risk of overstating assets, revenues, and gains, and understating liabilities, expenses, and losses. This principle helps ensure that financial statements provide a prudent view of the company's financial position.

Under ASPE, the Characteristic Which Ensures That When Preparing Financial