Question

Identify the accounting concept that was violated in each of the following situations.

A) Accrual accounting
B) Materiality
C) Consistency
D) Conservatism

Answer 1

The accounting concepts violated in each situation are: Consistency, Materiality, and Accrual Accounting.

Step-by-step explanation:

A) The accounting concept that was violated in situation A is Consistency. Consistency refers to the use of the same accounting methods and principles from one period to another.

B) The accounting concept that was violated in situation B is Materiality. Materiality relates to the importance or significance of an item or event in the financial statements.

C) The accounting concept that was violated in situation C is Accrual Accounting. Accrual accounting is the recognition of revenues and expenses when they are earned or incurred, regardless of when the cash is received or paid.