The accounting convention which states that profit must not be recognized until realized while all losses should be adequately provided for it termed
materiality
objectivity
consistency
conservatism
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Discussions (31)
Option D remain d Authentic answer wit dis: According to (Essential Acct text book charpter 9, page 70) so when using d balance as per cash book it will looks like dis: Format= Balance as per cash book = N2,970, Add Unpresented cheques= N3,950=N6920, Less bank charges=N220 Uncredited cheques =4,178 =N2,522 as bal as per bank statement, second-format When using d bal as per bank statement it will as well looks like dis: Format= Balance as per bank statement= N2,522, Add Uncredited cheques = N4,178, Add bank charges = N220 =N6920, Less Unpresented cheques =N3,950= N2,970 as balance as per cash book. For enqury call or whatsapp me wit 07037515020 tanks 2 all.
D answer is not in d options provided. D real answer is "realization concept". Conservatism or prudence; is an accounting principle dat requires accountants 2 avoid over statement of profit.
If you said D is the correct answer, please define realization and conservatism?
D, bcus they need to estimate the profit and loss of the business organization
Option D is it Realization or conservatism concept, if realization concept, it is correct but if conservatism, it is wrong
the answer to that question is realization concept whioch shows that profit should not be assumed but only record money realized.
Realisation this concept requires the periodic recognition of income as soon as it is capable of being measured or when the value of the asset to be exchange can easelly be identified. whil conservatism requires the exercise of great care in recognising profit while all known loses are adequetly provided for, accountant do not zero in future profit. no matter how likely that may be. make your selection now.
agbo is right..the format he laid down is absolutely correct..we can also prepare bank reconciliation statement using the format
Conservatism is not d ansa. Conservatism means that acctant should take d figure dat undastate rada dan ovrstate d profit. D rigt ansa is realisation. Realization means when a customer pay hs liability nd d profit is brought into d acct is nw realize.
Realization concept states dat revenue is recognised as soon as goods are passed to the customer in exchange for valuable consideration while conservatism concept states dat 'income shud nt be anticipated and all possible losses must be provided for. It also states dat given a choice btwn two methods of valuing assets, the accountant shud choose the lower value'......so the correct option is 'D'.
