Which of the following would be an example of conservative accounting? a. Recording an increase in fair value of certain assets as a gain in net income but not recording a decrease in fair value as a loss.b. Estimating the percentage of bad debts as 6% of accounts receivable instead of 10% of accounts receivable.c. Estimating warranty costs to be 4% of sales instead of 9% of sales.d. Assessing the probability of a contingent liability as probable instead of reasonably likely.
Which of the following would be an example of conservative accounting? a. Recording an increase in fair value of certain assets as a gain in net income but not recording a decrease in fair value as a loss.b. Estimating the percentage of bad debts as 6% of accounts receivable instead of 10% of accounts receivable.c. Estimating warranty costs to be 4% of sales instead of 9% of sales.d. Assessing the probability of a contingent liability as probable instead of reasonably likely.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which of the following would be an example of conservative accounting?
a. Recording an increase in fair value of certain assets as a gain in net income but not recording a decrease in fair value as a loss.
b. Estimating the percentage of
c. Estimating warranty costs to be 4% of sales instead of 9% of sales.
d. Assessing the probability of a
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