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JAMB Principles of Accounts 2003 Question 8

Question 8

Accounting Concepts and Conventions

Which accounting concept supports the assertion that economic reality takes precedence over legal issues?

  1. A.Realization concept
  2. B.Substance over form
  3. C.Conservatism
  4. D.Measurement concept
Show the answer and explanation

Answer: B (Substance over form)

Explanation

Substance over form means transactions are recorded by their economic reality, not just their legal form (e.g. hire purchase assets).