PRC-1 · Chapter 1 · Question 70 of 100
The 'Prudence concept' in accounting specifically demands caution when making estimates. Therefore, accountants must ensure that they do NOT:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Overstate assets and overstate income.
Explanation
The prudence concept requires a cautious approach, specifically ensuring that assets and income are not overstated, and liabilities and expenses are not understated.
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