Explain about conservatism, Accounting Basics

Assignment Help:

Q. Explain about Conservatism?

Conservatism The Conservatism means being prudent or cautious and making sure that assets and net income are not overstated. Such overstatements are able to mislead potential investors in the company and creditors making loans to the company. We apply conservatism while the lower-of-cost-or-market rule is used for inventory. Accountants have to realize a fine line exists between conservative and incorrect accounting.

The next segment of this chapter discusses the conceptual framework project of the Financial Accounting Standards Board. The FASB planned the conceptual framework project to resolve some disagreements about the proper theoretical foundation for accounting.

2090_Explain about Conservatism.png


Related Discussions:- Explain about conservatism

Project, collection of data and methodology

collection of data and methodology

The following stockholders'' equity accounts arranged, The following stockh...

The following stockholders' equity accounts arranged alphabetically are in the ledger of McGrath Corporation at December 31, 2011. Common Stock ($10 stated value) $1,500,0

Materiality concept, Materiality Concept: There are several events in ...

Materiality Concept: There are several events in business that are trivial or insignificant in nature. The cost of reporting and recording such events will not be justified th

Balance Sheet, can you show me a sample balance sheet with retained earning...

can you show me a sample balance sheet with retained earnings included?

Inventory valuation, The Kauai Surf Company sells high-end surfboards to to...

The Kauai Surf Company sells high-end surfboards to tourists.  The inventory is purchased from a manufacturer in Honolulu.

State about the cash payments journal, State about the Cash payments journa...

State about the Cash payments journal A special journal used to record any payment of cash. There would be a check number given to be recorded in journal as well. Source docume

.., Ask queshow to be an experttion #Minimum 100 words accepted#

Ask queshow to be an experttion #Minimum 100 words accepted#

A physical inventory on december 31 shows 2, a physical inventory on decemb...

a physical inventory on december 31 shows 2,000 units on hand. holliday sells the units for $12 each. the company has an effective tax rate of 20%. holliday uses the periodic inv

Taking a physical inventory in periodic inventory procedure, Q. Taking a ph...

Q. Taking a physical inventory in periodic inventory procedure? Taking a physical inventory in periodic inventory Procedure Company personnel determine ending inventory cost by

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd