For the past twenty years,Ace Electronics has had a policy of expensing all assets that cost less than $50,even if they are expected to last for more than a year,because it is simpler and easier than depreciating low-cost assets over their useful lives.This year Ace Electronics decided that because of inflation it would begin expensing all assets that cost less than $100.This accounting choice would be considered ________.

Question

Quizplus · Accepted Answer

This accounting choice is considered conservative because it expenses assets more quickly, which may result in lower net income in the short term but simplifies accounting processes and reflects a cautious approach to asset valuation.

For the Past Twenty Years,Ace Electronics Has Had a Policy