Multiple choice

According to which of the following accounting principles should a business not anticipate any profit but provide for all possible losses?

  1. Prudence (conservatism) principle

  2. Cost benefit principle

  3. Materiality principle

  4. Consistency principle

  5. Going concern assumption

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

This is the correct answer. This principle says that a business should not anticipate any profit but provide for all possible losses.