Accounting Multiple Choice Question – 13 February 2020

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

The accounting concept which prevents firms from frequently changing the stock valuation method they use, thereby preventing them from manipulating the figures in their profit and loss accounts and balance sheets, is……

Select ONE answer:

  1. The materiality concept.
  2. The consistency concept.
  3. The prudence concept.
  4. The going concern concept.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

  1. Not correct
  2. Correct – The consistency concept means that similar items should be accounted for in a similar way from one accounting period to the next. Therefore, stock should be valued consistently over time. This would not be the case if the method used to value it or approximate its cost, changed from year to year.
  3. Not correct
  4. Not correct

 

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