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

Accounting conventions, Accounting conventions The phrase 'convention' ...

Accounting conventions The phrase 'convention' is used to signify customs or ethnicity as a guide to the research of accounting statements. A variety of accounting conventions

What is journal, Q. What is journal? In explaining the rules of credit ...

Q. What is journal? In explaining the rules of credit and debit we recorded transactions directly in the accounts. Every ledger (general ledger) account shows only the increase

Business transactions and the accounting equation, Business transactions an...

Business transactions and the accounting equation A transaction is any activity which changes the value of a firm's assets, liabilities or owner's equity. Every transaction

Fifo under perpetual inventory procedure, Q. FIFO under perpetual inventory...

Q. FIFO under perpetual inventory procedure? FIFO under perpetual inventory procedure in perpetual inventory procedure the ending balance in the Merchandise Inventory account r

Homework, #quest1. Use the general journal to journalize the following tran...

#quest1. Use the general journal to journalize the following transactions completed during July of the current year. 2. Post from the general journal to the general ledger. Using

Asset or expense?, what does office stationery at year end classify as? ass...

what does office stationery at year end classify as? asset or expense?

Accounting Standards, Write short notes on 5 modern accounting techniques

Write short notes on 5 modern accounting techniques

Accounting theory and practice 1st year mcom, Acid test ratio = 2.5, curre...

Acid test ratio = 2.5, current ratio = 1.5 net working capital = 10,00,000 fixed assets =? Share holder''s fund = 15,00,000 Stock inventory =? Bank overdraft =? Share capital =

Macrs, define Macrs in detail

define Macrs in detail

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