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प्रश्न
Explain the principle of consistency.
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उत्तर
- It is possible to adopt a variety of principles and procedures for business transactions. An accountant is often faced with a choice of methods of dealing with certain items like depreciation of fixed assets, valuation of closing stock etc. Having made his choice, he should follow it consistently so that the figures of one accounting period may be comparable with those for another.
- Hence whatever accounting method a business unit decides to adopt, a consistent approach has to be followed for different accounting periods. However, consistency does not prohibit a change in accounting policies. Necessary required changes are fully disclosed by presenting them in the financial statements indicating their probable effects on the financial results of the business.
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संबंधित प्रश्न
Explain the Money Measurement Concept.
On the basis of this concept, only those transactions are recorded in accounts which can be expressed in terms of money.
This concept assumes that the business will continue to exist for a long time in the future.
It is due to this concept that financial statements are prepared at regular intervals, generally one year.
According to this principle, accounts should be prepared in such a way that all the material information required by users of financial statements is clearly disclosed.
According to this principle, revenue is deemed to be realised when the goods have been transferred or the services have been rendered to a customer.
With reference to the concept of accounting only those transactions are recorded in accounts which can be expressed in terms of money. Justify either for or against.
The capital provided by the owner is a liability of the firm. Answer with reference to the concept of Accounting.
"Every transaction affects at least three accounts." Comment.
Explain Accounting Period Concept.
