Sitara Textile is using the prudence concept to record the profit in its income statement. According to prudence concept, Sitara Textile will record profit when it is ___________.
A
expected
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B
realized
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C
material
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D
received
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Solution
The correct option is B realized Prudence Concept also known as Conservatism Concept states that profits should not to be recorded until realised but all losses, even those which may have a remote possibility, are to be provided for in the books of account.