What is prudence or conservatism?
A) Understating assets and net income.
B) When in doubt, recognizing the option that is least likely to overstate assets and income.
C) Recognizing the option that is least likely to overstate assets and income.
D) Recognizing revenue when earned and realized.

Question

Quizplus · Accepted Answer

Prudence or conservatism in accounting refers to the practice of recognizing expenses and liabilities as soon as possible, but only recognizing revenues and assets when they are assured. This means choosing the option that is least likely to overstate assets and income when in doubt.

What Is Prudence or Conservatism