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

Question

Share Report Error

The 'Prudence Concept' is also known as:

A. Accrual

B. Consistency

C. Conservatism

D. Materiality

Answer: Option C

Solution (By JKSSB Mock Tests)

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

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

Request complete Subject PDF

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Accountancy and Book Keeping Questions

Question #1

The journal entry for transferring 'Net Profit' to capital account is:

A. Profit & Loss Appropriation A/c Dr. To Capital A/c

B. Capital A/c Dr. To Profit & Loss A/c

C. Drawings A/c Dr. To Capital A/c

D. Profit & Loss A/c Dr. To Capital A/c

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Net profit is closed by debiting Profit & Loss A/c and crediting Capital A/c (or Retained Earnings for companies).

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

Question #2

The 'Section 44AE' presumptive scheme is for:

A. Transporters (heavy goods vehicles)

B. Retail traders

C. Professionals

D. Manufacturers

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
Section 44AE is for plying, hiring or leasing goods carriages.

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

Question #3

Assertion (A): Capital Expenditure is shown in the Balance Sheet. Reason (R): Its benefit is exhausted within the current accounting period.

A. A is false but R is true

B. Both A and R are true and R is the correct explanation of A

C. A is true but R is false

D. Both A and R are true but R is not the correct explanation of A

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Capital expenditure yields benefits over multiple future periods (hence an asset), making Reason R false. R describes revenue expenditure.

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

Explore All Accountancy and Book Keeping MCQs