If depreciation is not not recorded to avoid reporting a net loss. Name the accounting principal that is violated ? A. Conservatism B. Full disclosure C. Cost principle D. Consistency?

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If depreciation is not not recorded to avoid reporting a net loss. Name the accounting principal that is violated ? A. Conservatism B. Full disclosure C. Cost principle D. Consistency?

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If depreciation is not not recorded to avoid reporting a net loss. Nam...

Accounting Principle Violated: Cost Principle
The cost principle is a fundamental accounting principle that states that assets should be recorded at their original cost, not their current market value. By not recording depreciation, the company is violating this principle.

Explanation:
- Cost Principle: The cost principle requires that assets be recorded at the amount paid to acquire them. Depreciation is the systematic allocation of the cost of an asset over its useful life. By not recording depreciation, the company is not accurately reflecting the decrease in value of the asset over time.
- Reporting Net Loss: The company may be avoiding reporting a net loss by not recording depreciation. Net loss is a common occurrence in business and should be reported accurately in financial statements to provide a true and fair view of the company's financial position.
- Transparency: The cost principle promotes transparency in financial reporting by ensuring that assets are reported at their original cost. Failing to record depreciation can mislead stakeholders about the true value of the company's assets.
- Consequences: Violating the cost principle by not recording depreciation can lead to inaccurate financial statements and misrepresentation of the company's financial position. This can erode the trust of investors, creditors, and other stakeholders.
In conclusion, by not recording depreciation to avoid reporting a net loss, the company is violating the cost principle, which is a fundamental accounting principle that ensures assets are accurately reported at their original cost.

Answered by Pj Commerce Academy · View profile

Community Answer

If depreciation is not not recorded to avoid reporting a net loss. Nam...

Conservation.

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If depreciation is not not recorded to avoid reporting a net loss. Name the accounting principal that is violated ? A. Conservatism B. Full disclosure C. Cost principle D. Consistency?

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