Personal opinion, judgements and estimates are made
while preparing the financial statements to avoid any possibility of...................... of assets and liabilities, income and expenditure,
keeping in mind the convention of conservatism.
Answer & explanation
Correct answer: option 2
While deciding either cost of inventory or market value of
inventory, many personal judgements are to be made based on certain
considerations. Personal opinion, judgements and estimates are made
while preparing the financial statements to avoid any possibility of
over statement of assets and liabilities, income and expenditure,
keeping in mind the convention of conservatism.