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

Journal entries, on april-1,2005,raghu started a business of selling steel ...

on april-1,2005,raghu started a business of selling steel pipes and angles.he invested cash of Rs.50,00,000 & opened a current a/c with bank for Rs.20,00,000.He took loan from ICIC

Weighted-average under periodic inventory procedure, Weighted-average under...

Weighted-average under periodic inventory procedure the weighted-average method of inventory costing is a income of costing ending inventory using a weighted-average unit cost. Com

Illustrate about accounting cycle, Q. Illustrate about accounting cycle? ...

Q. Illustrate about accounting cycle? The accounting cycle is a series of points performed during the accounting period some throughout the period and some at the end to reco

Responsibility of leader and expert, Q. Responsibility of Leader and expert...

Q. Responsibility of Leader and expert? As a partner in the firm Tracy will have numerous broad responsibilities. She will engage in business development, high-level client ser

Are mailing lists is prepaid or period expense?, Are mailing lists are cons...

Are mailing lists are considered as prepaid or period expens?

Example of net realizable value, Example of net realizable value? To ex...

Example of net realizable value? To exemplify a necessary write-down in the cost of inventory presume that an automobile dealer has a demonstrator on hand. The dealer obtained

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

Accounting concepts, In earlier section, we had illustrated accounting as t...

In earlier section, we had illustrated accounting as the language of business. Along with language, accounting has several dialects. There are dissimilarities in terminology. In de

Manage budget and forecasts, hi i am lookimg forword someone to do my assig...

hi i am lookimg forword someone to do my assignmet plz as i am not feeling weel to do it by myself

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