NABTEB Accounting 2025 Objective — Question 1

Question 1 of 60 from the National Business and Technical Examinations Board (NABTEB) Accounting 2025 Objective paper, with the correct answer and a full explanation.

The accounting principle that requires businesses to anticipate profits before losses is _____ concept.

A. accrual
B. matching
C. materiality

Explanation

The prudence (conservatism) concept requires businesses to be cautious and not overstate profits; it anticipates losses but only recognises profits when realised.

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