The prudence (conservative) accounting convention for financial reports -:

Select one:

a.

states that profits should always be understated: for example calculate profit and reduce by 10%.

b.

calls for the financial accounts to be stated with the assumption that the business could go out of business tomorrow.

c.

suggests that assets should never be revalued upwards, in order to be conservative.

d.

suggests that asset values should be judged more severely for inclusion inthe accounts than liability values.