Multiple choice

Concept of “prudence” is also known as

  1. concept of consistency

  2. concept of conservatism

  3. concept of objectivity

  4. dual concept
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Prudence and conservatism are synonymous in accounting. This principle advises anticipating all possible losses but never anticipating gains, ensuring financial statements don't overstate assets or income. Consistency uses same methods year-to-year, objectivity requires verifiable evidence, and dual concept refers to double-entry.

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