Which of the Following Actions Are Consistent with the Notion

question 60

Multiple Choice

Which of the following actions are consistent with the notion of "prudence"?

• A)deliberate overstatement of expenses to reduce profits.
• B)excessive provisions for warranty expenses.
• C)careful assessment of doubtful debts.
• D)adoption of accelerated depreciation method to reduce profits.
• E)moving forward unrealised sales to increase profits.

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Definitions:

Subsequent Assignment

The act of transferring rights or obligations to another party after the original assignment has already taken place.

Superior Rights

Legal or contractual rights that have precedence or higher priority over others in a specific situation.

Majority

A term used to describe persons who have reached the legal age of adulthood.

Equal Dignities Rule

The legal rule that provides that when a party appoints an agent to negotiate an agreement that must be in writing, the appointment of the agent must also be in writing.