Which of the following principles states that a business should not report anticipated​ gains?

Question content area bottom
Part 1
A.
materiality concept
B.
conservatism
C.
disclosure
D.
consistency

1 answer

The principle that states that a business should not report anticipated gains is:

B. conservatism

The conservatism principle in accounting dictates that when faced with uncertainty, businesses should err on the side of caution and not recognize revenues until they are realized or earned. This means that anticipated gains should not be reported until they are certain.