The convention of Prudence when applied to the balance sheet results
The convention of prudence, also known as the principle of conservatism, is an accounting principle that requires businesses to err on the side of caution when recording financial information. This means that businesses should not overstate assets or profits, and should instead take a conservative approach by understating assets and profits. When applied to the balance sheet, the convention of prudence results in the understatement of assets and the overstatement of liabilities. This is because businesses are required to record assets at their historical cost, even if the fair value of the assets has increased. Additionally, businesses are required to record liabilities at their present value, even if the future cash flows associated with the liabilities are uncertain
'M' allocates 20% of his income to food and 40% of the remaining amount to rent. The expenditure on education is three times higher than his savings, wh...
A man invested a certain amount of sum at 12.5% per annum simple interest and earned an interest of Rs.1800 after 2 years. If the same amount is investe...
Among the 720 employees in the office, 30% engage exclusively in playing cricket, and 40% participate in both cricket and chess. If 20% of the employees...
The only expenses of Arun are on grocery, rent and fun expenses. Arun spent Rs. 4,250 on fun, amount spent by him on rent is Rs. 9,000 more than that on...
A car driver’s income consist of his salary and tips. During one week his tips were 5/4 of his salary. What portion of his total income came from ...
Rakesh obtained 25% more marks than Ambuj Suresh obtained 52% less marks than Rakesh. Marks obtained by Suresh are what percent less than marks obtained...
Milk contains 6% water. What quantity of pure milk should be added to 12 litres of milk to reduce the quantity of water to 3%?
A man invested all his current month income in starting of a new business in which he spends 30% in advertisement 15% of remaining in furniture 20% of r...
Monthly income of A is Rs. 12000 and he saves 44% of his monthly income. If monthly expenditure of A is decreased by 35% while his monthly savings is in...
In a school, 30% of the students are not participating in any competition. 80% of the students who are participating in the competition are girls. If 42...
