​"Anticipate no profit and provide for all possible losses". It is based on the convention of:

Correct option is C

The correct answer is (c) Conservatism

Explanation:
• The statement “Anticipate no profit and provide for all possible losses” directly reflects the conservatism (prudence) concept.
• This principle ensures that profits are not overstated and losses are recognized as soon as they are foreseeable.
• It promotes cautious financial reporting, preventing overvaluation of assets or income.
• It ensures that financial statements present a realistic view of the organization’s financial position.

Information Booster:
• Also called the Principle of Prudence.
• Emphasized by AS-1 (Accounting Standard – Disclosure of Accounting Policies).
• Helps in maintaining creditors’ confidence by avoiding inflated profits.
• Encourages provision for doubtful debts and depreciation.
• Key phrase: “Recognize all probable losses, but only realized gains.”

Additional Knowledge:
• Consistency Concept: Requires uniform accounting methods across periods.
• Full Disclosure Concept: All relevant facts must be clearly disclosed in financial statements.
• Materiality Concept: Only significant information affecting decision-making should be recorded