New Enroll in RBI Gr B 2025 Exclusive New Batch on March 18

    Question

    K Enterprises follows the written down value method of

    depreciating machinery year after year due to which of the following:
    A Comparability Correct Answer Incorrect Answer
    B Convenience Correct Answer Incorrect Answer
    C Consistency Correct Answer Incorrect Answer
    D Continuity Correct Answer Incorrect Answer
    E Conservatism Correct Answer Incorrect Answer

    Solution

    Consistency is one of the fundamental accounting principles, which requires a company to apply the same accounting methods and procedures from one accounting period to another, to ensure that the financial statements are comparable over time. By consistently using the written down value method of depreciation, Kanika Enterprises is ensuring that its financial statements remain comparable and that the value of its machinery is consistently depreciated in a predictable manner.

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