O-LevelAccountingAccounting principles and policies7707/13 · Oct/Nov 2022 · Q341 Mark

What does the principle of prudence ensure?

AAssets are not understated.

BLiabilities are not estimated.

CLosses are not anticipated.

DProfits are not overstated.

✓ Correct answer

D: Profits are not overstated.

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Topic: Accounting principles and policies, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, Oct/Nov 2022 Paper 1 Variant 3, question 34.

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