Which of the following is NOT listed as a basic accounting principle?

• A. Conservatism
• B. Historical Cost
• C. Objective Principle
• D. Accrual Principle

Answer: (A)

This question tests which item is not typically listed as a basic accounting principle. The Objective (or Objectivity) Principle requires that financial information be based on verifiable evidence. The Historical Cost Principle says assets should be recorded at their original cost, providing a reliable and verifiable measurement. The Accrual Principle requires recognizing revenues and expenses when they are earned or incurred, regardless of when cash changes hands. Conservatism, while an important guideline in practice to avoid overstating assets or income, is generally treated as a constraint or prudence rule rather than one of the core fundamental principles. Therefore, Conservatism is not listed as a basic accounting principle in many standard inventories of principles.