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The concept of conservatism will have the effect of______________?
Accountingmedium
AOverstatement of Assets
Understatement of Assets
COverstatement of Liabilities
DUnderstatement of Liabilities The concept of conservatism will have the effect of understatement of assets since the financial statements are usually drawn up on rather a conservative basis. Window-dressing i.e., showing a position better than what it is, is not permitted.
Correct Answer: B. Understatement of Assets
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