Statement A: Rohit has a business and his friend Vijay who asks him why he has to show the entire revenue, rather why not make it lower and reduce tax. But Rohit strictly refuses. What is the concept Rohit is adhering to?
Statement B: Revenues need to be recorded in books of account to avoid any sort of confusion. This is in accordance to which concept?
Statement A: Rohit has a business and his friend Vijay who asks him why he has to show the entire revenue, rather why not make it lower and reduce tax. But Rohit strictly refuses. What is the concept Rohit is adhering to?
Statement B: Revenues need to be recorded in books of account to avoid any sort of confusion. This is in accordance to which concept?
The correct option is B Objectivity
Statement A: Rohit is adhering to the concept of Objectivity which is the ability of any recorded amount to be verified. Had he opted to lower it and showed his revenue, he would not be able to verify it properly and act against the Government. Objectivity means the absence of bias or prejudice.
Statement B: According to Objectivity, all transactions in accounting need to be recorded in an objective manner and must be supported by relevant documents. Hence, revenue needs to be recorded in books of accounts to avoid confusion.
Objectivity
Statement A: Rohit is adhering to the concept of Objectivity which is the ability of any recorded amount to be verified. Had he opted to lower it and showed his revenue, he would not be able to verify it properly and act against the Government. Objectivity means the absence of bias or prejudice.
Statement B: According to Objectivity, all transactions in accounting need to be recorded in an objective manner and must be supported by relevant documents. Hence, revenue needs to be recorded in books of accounts to avoid confusion.
