What term is used to refer to the decision about whether to report an item in the financial statements?

Question

Quizplus · Accepted Answer

Recognition refers to the decision about whether to report an item in the financial statements. Capitalization refers to the process of recording an expenditure as an asset instead of expensing it immediately. Realization refers to the point in time when a company recognizes revenue. Conservatism refers to the practice of being cautious when making accounting decisions and choosing options that are more conservative, which can result in lower earnings or assets being understated.

What Term Is Used to Refer to the Decision About