Nancy is an accountant incharge of preparing financial statements for ABC Ltd. Nancy asks for ABC’s records to support its payables and receivables, but officials of ABC say it will be too much work to get. They say to go with the numbers in the accounting system. Which of the following principles of accounting shall be violated if Nancy accepts the suggestion as given by the officials?

Conservatism principle

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Objectivity Principle

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Going Concern

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Cost Principle

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Solution

The correct option is B
Objectivity Principle

If Nancy accepts the suggestion as given by the officials, this will be a violation of the objectivity principle because the financial statements must be based on verifiable and reliable records and not on someone’s opinion.

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Similar questions

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Q. A sole proprietor decided to use the same bank account for his personal affairs as for his business. Which of the following accounting principles is violated?

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The correct option is B Objectivity Principle If Nancy accepts the suggestion as given by the officials, this will be a violation of the objectivity principle because the financial statements must be based on verifiable and reliable records and not on someone’s opinion.

The correct option is B
Objectivity Principle

If Nancy accepts the suggestion as given by the officials, this will be a violation of the objectivity principle because the financial statements must be based on verifiable and reliable records and not on someone’s opinion.