An accountant is uncertain about the best estimate of an amount for a business transaction.If there are two possible amounts that could be recorded,the amount least likely to overstate assets and earnings is selected.Which of the following qualities is characterized by this action?

Question

Quizplus · Accepted Answer

The action described in the scenario is an application of the conservatism principle, which requires accountants to select the option that is less likely to overstate assets or income. This principle helps to ensure that financial statements are not overly optimistic and provide a more accurate picture of a company's financial position.

An Accountant Is Uncertain About the Best Estimate of an Amount