Depreciation was not recorded because to do so wold result in a net loss for the period. Indicate the accounting principle that is violated___________.

Cost principle

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Consistency

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Materiality

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Going concern

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Solution

The correct option is B Consistency
If Depreciation was not recorded because to do so wold result in a net loss for the period. The accounting principle that is violated is consistency principle. According to consistency principle, the company should use same accounting treatment for similar events or transactions. It facilitates better comparison and understanding.

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Similar questions

(a) Describe various branches of accounting.

(b) The management of ABC Ltd. changed the depreciation method for the last three years. Which principle is not followed?

Rectify the following errors assuming that suspense account was opened. Ascertain the difference in trial balance.

(i) Depreciation provided on machinery Rs. 4,000 was not posted to depreciation account.

(ii) Bad debts written-off Rs. 5,000 were not posted to debtor's account.

(iii) Discount allowed to a debtor Rs. 100 on receiving cash from him was not posted to discount allowed account.

(iv) Goods withdrawn by proprietor for personal use Rs. 800 were not posted to drawings account.

(v) Bills receivable for Rs. 2,000 received from a debtor was not posted to bills receivable account.

If the Depreciation is not accounted, the net profit for the period will be ______

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