Which of the following concepts of accountancy states that a conscious approach should be adopted in ascertaining income so that profits are not overstated ?

Correct option is A

The  Conservation (or prudence) concept is a guideline for recording transactions under conditions of uncertainty. Its core tenet is "Do not anticipate a profit but provide for all possible losses". This approach prevents the overstatement of assets and income, ensuring financial statements present a realistic and reliable picture, not an overly optimistic one. Examples include valuing inventory at the lower of cost or market value and creating a provision for doubtful debts. 
Additional Knowledge
(2) Materiality relates to the significance of an item or event. An item is material if its omission or misstatement could influence the decisions of financial statement users. It does not specifically focus on avoiding the overstatement of profits in the way conservatism does.
(3) Objectivity emphasizes that accounting records should be based on verifiable and reliable evidence (e.g., invoices, receipts) rather than personal bias or opinion. While it promotes reliable reporting, it does not specifically address the asymmetry of recognizing losses versus gains to prevent profit overstatement.
(4) Consistency states that the same accounting methods and principles should be applied from one accounting period to another to ensure comparability over time. This principle ensures uniformity in application, not caution in the face of uncertainty to avoid overstating income.