Identify the accounting concept which is being violated in following situation: (1) Mr. pankaj owner of handloom house changed method of changing depreciation from straight line method to written down value method.
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Answer:
CONSISTENCY CONCEPT
Explanation:
BECAUSE CONSISTENCY CONCEPT STATES THATACCOUNTING POLICIES AND PRACTICES FOLLOWED BY BUSINESS SHOULD BE UNIFORM AND SHOULD BE CONSISTENT OVER THE PERIOD OF TIME
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The concept of accountancy is being followed in the given situation.
Explanation:
- In accountancy, the concept of consistency is very simple and easy to follow.
- It states that the transactions are ensured without any ambiguity and the events are recorded from one accounting year to the other in the same way.
- Difenret accounting methods are also implied in this category as it makes sure uniform and consistent business.
- Moreover, it follows FIFO and LIFO methods to ensure consistency.
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