Multiple choice

Which accounting principle is followed in adopting accounting policy of making provision for doubtful debts @ 5% on debtors?

  1. Prudence

  2. Substance over form

  3. Materiality

  4. All of these
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A Correct answer
Explanation

According to the prudence concept, a business must provide for all possible losses that can occur in future. Hence, provsion for doubtful debts is made.

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