Which of the following actions are consistent with the Doctrine of Conservatism?
A) deliberate overstatement of expenses to reduce profits
B) excessive provisions for warranty expenses
C) careful assessment of doubtful debts
D) adoption of accelerated depreciation method to reduce profits

Question

Quizplus · Accepted Answer

The Doctrine of Conservatism requires a careful assessment of doubtful debts, which is consistent with option C. Overstatement of expenses to reduce profits and adoption of accelerated depreciation method to reduce profits are not consistent with conservatism as they go against the principle of reporting information that is cautious and prudent. Excessive provisions for warranty expenses may or may not be consistent with conservatism depending on their nature and reliability.

Which of the Following Actions Are Consistent with the Doctrine