Q8- Basic Accounting Processes and Systems (ICAN ATSWA Sept 2021 Insight)

Question 8:

Another name for prudence concept is  

A. Accrual  

B. Historical cost  

C. Duality  

D. Materiality  

E. Conservatism 

The correct answer is (E)

Past Question and Review:

Under the prudence concept, you are required not to overestimate the amount of revenues recognized or underestimate the amount of expenses. 

Also, one should be conservative in recording the amount of assets, and not underestimate liabilities. The result should be conservatively-stated financial statements.

The correct answer is (E)

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