The 'Prudence Concept' is also known as: MCQ with Answer and Explanation

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The 'Prudence Concept' is also known as:

A. Accrual

B. Consistency

C. Materiality

D. Conservatism

Answer: Option D

Solution (By JKExamLibrary)

Prudence (conservatism) means anticipating no profits but providing for all possible losses.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Practice More Accountancy and Book Keeping Questions

Question #1 Report Error

The formula 'Fixed Cost / Contribution Margin per Unit' is used to find:

A. Margin of Safety

B. Break-Even Point in Sales Value

C. Target Profit

D. Break-Even Point in Units

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Correct Answer: Option D

Explanation:
This formula yields the exact number of units a company needs to sell to cover all its fixed and variable costs.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2 Report Error

A liability arising from a past event, whose existence depends on a future uncertain event, is known as:

A. Deferred Liability

B. Contingent Liability

C. Current Liability

D. Fixed Liability

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Correct Answer: Option B

Explanation:
Contingent liabilities depend on the outcome of a future event (like a pending lawsuit) and are disclosed in footnotes.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3 Report Error

Which of the following is NOT a method of costing?

A. Process costing

B. Job costing

C. Marginal costing

D. Forensic costing

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Correct Answer: Option D

Explanation:
Forensic costing is not a standard costing method. Job, process, batch, contract, marginal are methods/techniques.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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