Classify each of the following accepted accounting practices as conservative or aggressive.1. Use lower-of-cost-or-market to value inventory.2. Expense all research and development costs rather than recording some research and development costs as an asset.3. Record loss contingencies when they are probable and can be reasonably estimated, but do not record gain contingencies until they are certain.

Question

Classify each of the following accepted accounting practices as conservative or aggressive.
1. Use lower-of-cost-or-market to value inventory.
2. Expense all research and development costs rather than recording some research and development costs as an asset.
3. Record loss contingencies when they are probable and can be reasonably estimated, but do not record gain contingencies until they are certain.

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