While determining the reporting value for inventory, the principle of conservatism dictates the lower of the historical cost or the replacement cost of a monetary value. This requires that the revenues are being reported in the same period as they are related to the expenses which were incurred. "Conservatism is a prudent reaction to uncertainty to try to ensure that uncertainties and risks inherent in business situations are adequately considered. The Case for Conservative Investment Returns Projections. The Mass Media - A Propaganda Model - epoha The conservatism concept dictates that gain contingencies ____________. The conservatism concept dictates that gain contingencies may not be recognized until they are realized may be recognized before they are realized in most cases may be recognized before they are realized if the probability of being collected is high may never be recognized, even if realized Question: 2. gain contingencies. martha washington inn restaurant; The conservatism principle is the foundation for the lower of cost or market rule, which states that you should record inventory at the lower of either its acquisition cost or its current market value. Choice "d" is incorrect. a. remote; reasonably estimable. A gain contingency is a condition or event that has the potential to create a gain or loss for an entity. Knowing that a company purchased a piece of land in 1950 for $10,000 does not really tell financial statement . The principle of conservative accounting is the main thing for lower of cost or market value specifies that inventory shall be recorded at acquisition cost or lower cost or maybe the current value. They are protracted, expensive and dangerous, as the D . About This Article This article is from the book: Intermediate Accounting For Dummies About the book author: Evaluation Rome Du Mythe L'histoire 6eme Pdf, 5. The principle of conservative accounting is the main thing for lower of cost or market value specifies that inventory shall be recorded at acquisition cost or lower cost or maybe the current value.

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