PRC-1 · Chapter 6 · Question 30 of 100
Which accounting principle establishes that a business should use the same depreciation method from one period to the next unless a change is justified by a change in the pattern of economic benefits?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Consistency Concept
Explanation
The consistency concept requires that accounting policies and measurement methods (like depreciation methods) are applied consistently from one period to another to ensure financial statements are comparable.
More Property, Plant and Equipment MCQs
- Q32The written down value of a fixture at 30 June 2022 was Rs. 86,400. It was originally purchased on 1 January 2020 and depreciated at 20%…
- Q33Which of the following statements about 'Residual Value' is completely correct according to IAS 16?
- Q34When acquiring property, plant, and equipment, which of the following is an example of an 'initial estimate of dismantling and removing'…
- Q35A business trades in its old delivery van for a new one. The new van's fair value is Rs. 800,000. The dealer gives a trade-in allowance of…
- Q36A company purchases a commercial aircraft. The aircraft has a body (useful life 20 years) and engines (useful life 5 years). How should…