Question

The accounting concept that refers to the tendency of accountants to resolve uncertainty and doubt in favor of understating assets and revenues and overstating liabilities and expenses is known as________.

• A. matching
• B. going concern
• C. conservation
• D. historical cost

Answer 1

Answer: (C)

conservation

The accounting concept that refers to the tendency of accountants to resolve uncertainty and doubt in favor of understating assets and revenues and overstating liabilities and expenses is known as conservatism principle. This principle states that all the expenses and losses should be recorded as soon as possible when there is uncertainty about the outcome, but to recognize

revenues only when they are assured of being received.