Which accounting concept or convention which, in times of rising prices, tends to understate asset values and overstate profits?

Related MCQs

• Which of the following is true statement for computerised accounting system? a. the computer accounting system is based on the concept of database. b. Computer accounting system does not away with the concept of creating and maintaining journals, ledger etc.
• Accounting procedures and accounting practices should remain same from year to year under which of the following accounting principles:
• The convention that states that the accounting practice should be followed consistently over the years
• The comparison of the results of one accounting period with that in the past is possible when the following convention is followed:
• Anticipate no profits and provide for all possible losses. This is essence of which of the following accounting principles:
• An asset was purchased for Rs.1000000 with the down payment of Rs.200000 and bills accepted for Rs.800000/-. What would be the effect on the total asset and total liabilities in the balance sheet?
• When stock is valued at cost in one accounting period and at lower of cost and Net realizable value in another accounting period
• When a machinery is purchased for cash, the cash balance is reduced and to that extent, the amount of machinery as an asset is recorded. This is done to follow which of the following accounting principles:
• Process of spreading cost 3. Profit and Loss A/c 4. Check arithmetic accuracy 4. Accounting for Fixed Asset
• Which of the following statements is true with regard to written down value method of depreciation? i. The rate at which the asset is written off reduces year after year ii. The amount of depreciation provided reduces from year to year iii. The rate of depreciation as well as the amount of depreciation reduce year after year iv. The value of the asset gets reduced to zero over a period of time