Which of the following statements about accounting concepts are correct?
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The accruals concept requires that revenue earned must be matched against the expenditure incurred in earning it.
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The prudence concept means that understating of assets and overstating of liabilities is desirable in preparing financial statements.
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The reliability concept means that even if information is relevant, if it is very unreliable, it may be misleading to recognise it in the financial statements.
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The substance over form convention is that, whenever legally possible, the economic substance of a transaction should be reflected in financial statements rather than simply its legal form.
A. 1, 2 and 4
B. 2, 3 and 4
C. 1, 3 and 4
D. 1, 2 and 3
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