12 August 2013
A businessman purchased goods for Rs 25,00,000 and sold 70% of such goods during the accounting year ended on 31st March,2013.The market value of the remaining goods was Rs 5,00,000.He valued the closing stock at Rs 5,00,000 and not at Rs 7,50,000 due to--- (a)Money measurement concept (b)conservatism (c)Cost concept
The conservatism principle is the general concept of recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received.
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