A company discovers that its Cost of goods sold is understated by an insignificant amount.They do NOT need to correct the error because of the conservatism principle.

Name: A company discovers that its Cost of goods sold is understated by an insignificant amount.They do NOT need to correct the error because of the conservatism principle.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The conservatism principle does not justify the intentional misstatement of financial statements. All errors, no matter how insignificant, should be corrected.

A Company Discovers That Its Cost of Goods Sold Is