Accounting for IGCSE & O level - Advanced Principles (Section 7 - No. 8)
The principle of prudence supports which of the following actions?
Estimating sales revenue too high
Recognizing future profits
Recognizing potential losses as soon as there is a likelihood of them happening
Accurately estimating the value of all assets
Explanation
Prudence advocates for the recognition of potential losses rather than being optimistic about profits.