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 ___________.

expected

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realized

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material

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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.

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According to which concept, the financial records should always be published in a definite time period?

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