frr07172017-11-29 00:51:28

Q. Conservative, rather than aggressive, accounting is most likely associated with: increased sustainability of earnings. higher current reported performance. recognition of losses once certain. Solution 请老师解释下A. 看懂了意思, 看没明白sustainability为什么要avoid? 谢谢. A is correct. Conservative accounting choices decrease a company’s reported performance and results in the current period and may increase its reported performance and financial position in later periods. Therefore, it typically avoids a sustainability issue. B is incorrect because higher current reported performance is a result associated with aggressive accounting choices, not conservative ones. C is incorrect because in general, conservatism means that losses are recognized when probable; waiting to recognize losses until they are certain would be an aggressive approach rather than a conservative one.