A company has a machinery costing Rs. 5, 00, 000. Depreciation is char
Depreciation is charged as follows:
Yr 2010 – 50,000
Yr 2011 – 30,000
Yr 2012, 2013 – 50,000
Which principle is violated?
Right Answer is: C
• Consistency Principle- this principle requires that a company to follow same accounting principles/ procedures/ practices/methods from one accounting period to the another accounting perioD.
• This principle allows all stakeholders to make meaningful
comparisons between different accounting periods.
• It also allows a company to make a change to a more preferred accounting method after disclosure of the change and its effects to the stakeholders.
• Here in the given case the Consistency Principle is violateD.