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Question

What is the reason for the creation of a provision for discount on debtors?


A

To fulfil the accrual concept

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B

To fulfil the going concern concept

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C

To fulfil the prudence concept

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D

None of the above

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Solution

The correct option is C

To fulfil the prudence concept


Provision for discount on debtors is created to fulfil the concept of prudence or conservatism


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