Tag: Drawings

Lucy Walton runs a small on-line business, selling silver jewellery that she makes in her house.

She uses a variety of equipment to make the silver jewellery, which she depreciates each year.

She keeps the method of depreciation the same from one financial year to the next.

Select ONE answer:

1. Materiality
2. Consistency
3. Business entity
4. Prudence

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 concept of ‘consistency’ requires that accounting methods are kept the same from one accounting period to the next. This ensures that financial statements from one year can be compared to financial statements for the following year.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.