XSIQ
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Accounting - Accounting Principles: Conservatism
Conservatism
May also be known as prudence. Losses should be recognised as soon as the
business is aware of their likely event, whilst profits should not be
recognised until they actually occur.
The net realisable value of stock has fallen below cost yet the owner
refuses to adjust cost of goods sold [1]calculations.
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[1] http://alison.com/#
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