Accounting Multiple Choice Question – 26 August 2017

The owner of a business has decided to create a provision for doubtful debts.

Which TWO accounting concepts are being applied?

Select ONE answer:

1. Accruals and going concern
2. Accruals and prudence
3. Consistency and business entity
4. Consistency and prudence
5. Prudence and business entity

What is the prudence concept?
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This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 2 – The provision is a prudent one and an accrual to ensure it is booked in the right accounting period.

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