Multiple choice

Which principle is often described as ''Anticipate no profit but provide for all possible losses''?

  1. Consistency Principle

  2. Accrual Principle

  3. Conservatism Principle

  4. Principle of Prudence
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Under the conservatism principle, if there is uncertainty about incurring a loss, you should tend toward recording the loss. Conversely, if there is uncertainty about recording a gain, you should not record the gain.

Keep practicing — related questions