The 'Consistency' concept means that: MCQ with Answer and Explanation

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The 'Consistency' concept means that:

A. Accounting policies should be changed every year

B. Different methods can be used arbitrarily

C. Only cash basis should be used

D. Same accounting policies should be applied from one period to another

Answer: Option D

Solution (By JKSSB Mock Tests)

Consistency ensures comparability; accounting policies should be consistently applied over time, changes only for valid reasons.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

When starting a BRS with a debit balance as per the Cash Book, cheques issued but not yet presented for payment should be:

A. Added

B. Ignored

C. Deducted

D. Divided

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Correct Answer: Option A

Explanation:
These cheques decreased the cash book balance but not the pass book. To match the pass book, they must be added back.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

The 'Bills Payable Book' records:

A. Cash purchases

B. Acceptances given to creditors

C. Bills drawn on debtors

D. All credit purchases

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Correct Answer: Option B

Explanation:
Bills Payable Book records bills of exchange accepted by the business payable to creditors.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

A favourable variance in materials cost indicates that:

A. More material was used than budgeted

B. Sales volume increased

C. Material price increased in the market

D. Actual cost of materials was less than the standard cost

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Correct Answer: Option D

Explanation:
Favourable means beneficial to profit, which happens when actual costs are lower than standard expected costs.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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