which principle can be proved helpful in creation of secret reserve?
Hello Sanya,
Conservatism Principle can be proved helpful in creation of secret reserve.
Even one of the drawback of conservatism principle is that it may be used for creation of secret reserve. For e.g. by creating excess provision of doubtful debts, depreciation, etc. and thus financial statments may not depict a true and fair view of state of affairs of the business.
Regards
Conservatism Principle can be proved helpful in creation of secret reserve.
Even one of the drawback of conservatism principle is that it may be used for creation of secret reserve. For e.g. by creating excess provision of doubtful debts, depreciation, etc. and thus financial statments may not depict a true and fair view of state of affairs of the business.
Regards