Why is the principle of conservatism important ... - SS1 Accounting Principles And Rules of Double Entry Question
Why is the principle of conservatism important in double-entry bookkeeping?
The principle of conservatism is important in double-entry bookkeeping because it helps to ensure that the accounting records are accurate and reliable. By recording the lower value or amount when there are uncertainties or doubts, it avoids overvaluing assets or underestimating liabilities, which could lead to misleading financial information.
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