The accounting convention that the objectivity principle provides support for is:
A) prudence (conservatism).
B) historic cost.
C) accounting period.
D) relevance.

Question

Quizplus · Accepted Answer

The objectivity principle requires financial information to be based on objective evidence, rather than subjective opinions or beliefs. The historic cost convention is based on objective evidence and requires assets to be recorded at their original cost, which can be objectively verified through documentation such as purchase invoices. Therefore, the objectivity principle supports the use of the historic cost convention in accounting.

The Accounting Convention That the Objectivity Principle Provides Support for Is