A conservative policy with regard to capitalizing or expensing costs associated with plant assets avoids ________.

Question

Quizplus · Accepted Answer

A conservative policy with regard to capitalizing or expensing costs typically involves expensing costs rather than capitalizing them. This approach avoids overstating profits (since expenses reduce profit) and assets (since capitalizing costs would add them to the asset's value on the balance sheet).

A Conservative Policy with Regard to Capitalizing or Expensing Costs