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InterviewSolution
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State the name of the accounting principle, concept or convention with which the following statements or situations are associated:1. Provision for discount reserve on debtors is made in the accounts but provision for discount reserve on creditors is not usually made in the accounts.2. Provision for loss of theft of uninsured machinery will be made in the books of accounts soon after the theft even it there is possibility of recovery of this machinery if police catches the thief. |
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Answer» 1. According to Prudence concept or Conservatism concept, provision for discount reserve on debtors is made in the accounts but provision for discount reserve on creditors is not usually made in the accounts. 2. According to Prudence concept or Conservatism concept, provision for loss of theft of uninsured machinery will be made in the books of accounts soon after the theft even if there is possibility of recovery of this machinery if police catches the thief. |
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