Q. Explain what you understand by the term 'prudence'. How can an 'asymmetrically prudent' accounting treatment lead to the understatement of income in one period but an overstatement in future periods?

Q. Explain what is meant by the concept of substance over form. You can use examples from

within and/or outside accounting to help answer this question.

Q. Do you agree with the board's decision to state explicitly that a faithful representation represents the substance of an economic phenomenon instead of merely representing its legal form? Justify your answer