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State whether the following statements are true or false with reason:i. Book-keeping and accounting are one and the same thing.ii. Conservatism means to follow the safe side. |
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Answer» i. This statement is False. Book-Keeping means recording business transactions in a separate set of books and accountancy is the process of summarising and analyzing the business transactions which are recorded in the books of accounts, so book-keeping and accounting are not one and the same thing. ii. This statement is True. This accounting concept suggests that while preparing accounting statements, planning, policies, strategies, and budgets, all possible or anticipated losses must be taken into consideration. While unrealized prospective or anticipated profits should be ignored. This is known as “The policy of playing a safe game” or “Principal of Prudence”. |
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