New Register Here for NABARD Scholarship Test on Mar 22-23

    Question

    "Anticipate no profit and provide for all possible

    losses". It is based on the convention of:
    A Consistency Correct Answer Incorrect Answer
    B Full Disclosure Correct Answer Incorrect Answer
    C Conservatism Correct Answer Incorrect Answer
    D Materiality Correct Answer Incorrect Answer

    Solution

    The statement "Anticipate no profit and provide for all possible losses" reflects the accounting convention of conservatism. This convention suggests that when faced with uncertainty, accountants should be cautious and conservative in recognizing profits, but quick to recognize potential losses. This helps in presenting a more prudent and reliable picture of a company's financial position and performance.

    Practice Next