Accountants might recognize losses but not gains in certain situations. For example, the company might write-down the cost of inventory?

This Is the concept of conservatism, when there is an alternative that exists we have to choose the alternative which has the least effect on equity. In simplest terms, conservatism means- in case of doubt record any loss and do not record gain.

Inventories shall be recorded at the lower of cost and net realizable value. Conservatism  shall be exercise with care and caution when dealing with uncertainties in measurement process. it is not a license to deliberately understate the income and net assets, because in doing so, it is fraudulent or inaccurate reporting.

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Conservatism is true answer