According to the GAAP principle of conservatism, firms should delay the realization of uncertain revenues and gains and accelerate the realization of uncertain expenses and losses.

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The principle of conservatism suggests that when in doubt, firms should choose the option that is least likely to overstate their financial position. Therefore, uncertain revenues and gains should be delayed, while uncertain expenses and losses should be accelerated. This approach results in a more conservative and realistic representation of the firm's financial position.

According to the GAAP Principle of Conservatism, Firms Should Delay