Question

According to _______ concept entries in accounting records and data reported in the financial records should be supported by objective evidence.

• A. Reliable
• B. Verifiable
• C. Objective evidence
• D. Material

Answer 1

The correct option is C Objective evidence

The concept of objectivity requires that accounting transaction should be recorded in an objective manner, free from the bias of accountants and others. This can be possible when each of the transaction is supported by verifiable documents or vouchers.

For example, the transaction for the purchase of materials may be supported by the cash receipt for the money paid, if the same is purchased on cash or copy of invoice and delivery challan, if the same is purchased on credit.