What do you mean by principal of conservatism in accountancy?

Asked by Last Modified  

47 Answers

Learn Accountancy +1 Accounts

Follow 27
Answer

Please enter your answer

Deepali

Programming languages trainer with having 8 years experience

The conservatism concept is a concept in accounting which refers to the idea that expenses and liabilities should be recognised as soon as possible in a situation where there is uncertainty about the possible outcome and in contrast record assets and revenues only when they are assured to be received...
Comments
Dislike Bookmark

Commerce classes with concept clarity.

Expected losses , kindly consider in your books but expected gains , consider only when realized.
Comments
Dislike Bookmark

Good teacher available on urbanpro
1 Comments
Dislike Bookmark

Working professional with finance background

In simple language it is any gain. They are to be recorded in when it is gonna be recognised. Where as everyloss has to be recorded irrespective of the nature that is the loss may or may not be incurred
Comments
Dislike Bookmark

Experienced teaching experience for 20 years

It means cautious approach,that is why we estimate all losses . Provision for bad debts is an example of conservatism principal.This is also called prudence approach
Comments
Dislike Bookmark

ACCOUNTANCY EXPERTISE, Maths expert till 10th

This is a principle which says that the company accounts are to be prepared with high degree of verification. All probable losses should be booked whenever found but on the otherhand gains should be booked only when they are fully realized.
Comments
Dislike Bookmark

Good Marks with Good Learning and Knowledge

In business we can a loss or profit. But there can be possible loss (like my client will not give complete payment) or possible loss ( like I will receive a huge order). So as per conservatism concept, while preparing the accounts we shall always consider possible loss and have to make a provision for...
read more
In business we can a loss or profit. But there can be possible loss (like my client will not give complete payment) or possible loss ( like I will receive a huge order). So as per conservatism concept, while preparing the accounts we shall always consider possible loss and have to make a provision for that. But if there is a possible gain we shoul ignore it till it is realised. Its also known as Prudence concept. CA Sunil Kumar Thanks read less
Comments
Dislike Bookmark

Good Marks with Good Learning and Knowledge

In business we can have a loss or profit. But there can be possible loss (like my client will not give complete payment) or possible loss ( like I will receive a huge order). So as per conservatism concept, while preparing the accounts we shall always consider possible loss and have to make a provision...
read more
In business we can have a loss or profit. But there can be possible loss (like my client will not give complete payment) or possible loss ( like I will receive a huge order). So as per conservatism concept, while preparing the accounts we shall always consider possible loss and have to make a provision for that. But if there is a possible gain we shoul ignore it till it is realised. Its also known as Prudence concept. CA Sunil Kumar Thanks read less
Comments
Dislike Bookmark

The conservatism concept is a concept in accounting which refers to the idea that expenses and liabilities should be recognised as soon as possible in a situation where there is uncertainty about the possible outcome and in contrast record assets and revenues only when they are assured to be received...
Comments
Dislike Bookmark

Phonics and english grammar trainer and freelancing tutor for classes 1 to 5

It means you have to be conservative on losses. Means, you have to record all the certain and uncertain losses to be on safer side. But you should not record any gains is it's not sure or certain.
Comments
Dislike Bookmark

View 45 more Answers

Related Questions

What are the fixed assets? Give example.
as per as 10 fixed asset is an asset which is beingh kept in the business for the purpose producing goods or rendering services i e that asset is not being held for the purpose of sale in the normal course...
Vishal
0 0
5
Define Matrix.
Collection of numbers arranged in rows and columns.
Deepti

I have registered as a home tutor but i am not getting any messages.
PLEASE take premium membership of UrbanPro you will definitely received home tuition enquiry.
Netti surya prakash Rao
0 0
6

What is the difference between Bad debts and bad & doubtful debts. What are the legal compliances for the provisions for doubtful debts and bad debts recovered after being written off. 
Both are pretty much same.. Bad debts amount to be transferred to P/L a/c (dr side) Baddebts recovered P/L credit side as income Provision on doubtful debts to be deducted from debtors in balance sheet..
Suneha Sharma
1 0
7
difference b/w cash & cash eqivalant..
Cash is basically the money that is available with us in liquid form.And cash eqivalent are those items which can be converted into liquid form as and when required like fixed deposit ,they can be converted...
Madhav

Now ask question in any of the 1000+ Categories, and get Answers from Tutors and Trainers on UrbanPro.com

Ask a Question

Related Lessons

Introduction To Accounting: Part 18: Revenue Recognition Concept Or Realisation Concept
According to the Revenue Recognition Concept, revenue is considered to have been realised when a transaction has been entered into and the obligation to receive the amount has been established. It...

Nishant Kumar

0 0
0
Foundations Guiding Accounting Principles

Shashi Shankar

0 0
0
Why Tally is most popular accounting software in India?
Why is Tally the most popular accounting software in India? The top 10 reasons follow. 1.Easy maintenance : Maintaining an accounting software package hasn’t been more comfortable. A transformation...

Bright Computer Education

1 0
0
Distinguishing Between Provisions and Reserves

Shashi Shankar

0 0
0
Ways to Calculate Asset Depreciation
https://vz-3ad30922-ba4.b-cdn.net/51d7f26f-dc05-449c-965f-f15c3336ba53/play_480p.mp4

Shashi Shankar

0 0
0

Recommended Articles

The Trend of E-learning and it’s Benefits

E-learning is not just about delivering lessons online. It has a much broader scope that goes beyond manual paper or PowerPoint Presentations. To understand the reach of E-learning and how the whole process works in developing the Educational system, we will discuss a few points here. Let us find out how this new learning...

Read full article >

How To Choose The Right School For Children?

Quality education does not only help children to get a successful career and life, but it also hugely contributes to society. The formal education of every child starts from school. Although there are numerous schools, parents find it challenging to choose the right one that would fit their child. It is difficult for them...

Read full article >

The Rising Problems in Indian Government School

With the mushrooming of international and private schools, it may seem that the education system of India is healthy. In reality, only 29% of children are sent to the private schools, while the remaining head for government or state funded education. So, to check the reality of Indian education system it is better to look...

Read full article >

6 Exam Hall Tips To Follow, For Every Good Student

Appearing for exams could be stressful for students. Even though they might have prepared well, they could suffer from anxiety, tension etc. These are not good for their health and mind. However, following a few exam preparation tips can save them from all these and help them to score good marks. Let’s find out all...

Read full article >

Find Class 11 Tuition near you
Class 11 Tuition in Delhi
Class 11 Tuition in Bangalore
Class 11 Tuition in Kolkata
Class 11 Tuition in Hyderabad
Class 11 Tuition in Mumbai
Class 11 Tuition in Chennai
Class 11 Tuition in Pune
Class 11 Tuition in Gurgaon
Class 11 Tuition in Noida
Class 11 Tuition in Ghaziabad

Looking for Class 11 Tuition ?

Learn from the Best Tutors on UrbanPro

Are you a Tutor or Training Institute?

Join UrbanPro Today to find students near you