CA Inter P1 · Chapter 1 · Question 2 of 8
Which of the following is NOT one of the fundamental accounting assumptions referred to in AS 1, Disclosure of Accounting Policies?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Prudence
Explanation
AS 1 identifies going concern, consistency and accrual as the fundamental accounting assumptions; if they are followed, no specific disclosure is required. Prudence is not an assumption; it is one of the major considerations (along with substance over form and materiality) governing the selection and application of accounting policies.
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