The correct answer is: C. There is no application of conservatism principle in accounting.
Conservatism is a principle of accounting that states that assets and income should be conservatively stated, while liabilities and expenses should be conservatively stated. This means that assets should be recorded at their lower of cost or market value, and income should be recorded only when it is realized. Liabilities should be recorded at their estimated amount, and expenses should be recorded when they are incurred.
The conservatism principle is applied in accounting to ensure that financial statements are not misleading. By conservatively stating assets and income, and conservatively stating liabilities and expenses, financial statements provide a more accurate picture of a company’s financial position.
A. Accounting is commonly treated as language of business. This is because accounting is the language of business. It is used to communicate financial information to stakeholders, such as investors, creditors, and managers.
B. There are many views about accounting principles. This is because accounting is a complex and ever-changing field. There are many different ways to account for transactions, and different people have different opinions on which methods are best.
D. Accounting is based on accounting equation. The accounting equation is the foundation of accounting. It states that assets = liabilities + equity. This equation can be used to track the financial position of a company over time.