Commercial Applications
This principle states that accounting procedures and methods should remain consistent from one year to another.
- Materiality
- Consistency
- Conservatism
- Timeliness
Related Questions
According to this principle, cost of a particular period should be charged from the revenue of same period only.
- Matching principle
- Principle of full disclosure
- Dual aspect principle
- Realisation concept
Assertion (A): According to the Prudence Principle, the valuation of Closing Stock is based on either its cost price or its net realizable value, whichever is lower.
Reason (R): This practice ensures that a business firm does not present a more favourable financial position than what it actually is.
- A is true but R is false
- A is false but R is true
- Both A and R are true and R explains A.
- Both A and R are true but R does not explain A.
The Accounting Period Concept requires that financial statements be prepared at regular intervals, even if the business is expected to close soon.
- True
- False
Assertion (A): The Going Concern Principle assumes that a company will continue its operations for the foreseeable future.
Reason (R): This principle allows fixed assets and liabilities to be reported at their historical cost rather than their liquidation value.
- A is true but R is false
- A is false but R is true
- Both A and R are true and R explains A.
- Both A and R are true but R does not explain A.