C 2-14 Inconsistent Statements on Accounting Principles

Statement 2: Financial statements that were developed in accordance with generally accepted accounting principles should be conservative.

1. List the fallacies, half-truths, circular reasoning, erroneous comments or conclusions, and/or inconsistencies.
2. Explain by what authority and/or on what basis each item listed can be considered to be fallacious, circular, inconsistent, a half-truth, or an erroneous comment or conclusion. If the statement or a portion of it is merely out of context, indicate the context(s) in which the statement would be correct.