Question

Anticipate no profits and provide for all possible losses. This is

essence of which of the following accounting principles:

(a) Dual Aspect Principle (b) Materiality Principle

(c) Consistency Principle (d) Conservatism Principle​

Answer 1

Answer:

(D) Conservatism Concept.

Explanation :

This concept is also known as Prudence concept, and the concept states that all anticipated losses should be recorded in the books while all the anticipated profits should be ignored.

In other words,

The accountant should record the liabilities and expenses as soon as they occur but should record the revenues only when they are assured or realised.

Answer 2

Answer:

Concept:

All the losses of the business are to be provided for but the profits should not be taken into account before they are actually realised.

Solution:

The principle of Conservatism states the above.

Therefore, the correct answer is (d)