Accounting · Accounting Principles
The Principle of Conservatism (Prudence) in accounting requires that:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Expected losses are recognized even before they actually occur✓
- 2Expenses are recognized only when cash payment is settled
- 3All income and assets must be intentionally overstated
- 4Profits are recorded in anticipation before realization
Correct answer
Expected losses are recognized even before they actually occur
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