Accounting principles are based on
A. Practicability
B. Subjectivity
C. Convenience in recording
D. None of the above
Answer: Option A
Solution (By Examveda Team)
Accounting principles are developed to ensure that financial statements are reliable, practical, and useful for decision-making.These principles are not based on personal opinions or arbitrary choices but are guided by practicability, meaning they should be easy to apply and suitable in real business situations.
Subjectivity is avoided in accounting as far as possible because it reduces reliability and comparability of financial information.
Convenience in recording is not a valid basis, as accounting focuses on accuracy and usefulness rather than mere ease.
Therefore, accounting principles are primarily based on practicability.
Hence, the correct answer is Practicability.
This Question Belongs to Commerce >> Accounting
The correct option is ✅ A. Practicability.
Explanation
Accounting principles are designed to be functional and applied consistently in real-world scenarios. Practicability (also referred to as feasibility) ensures that these principles can be implemented in a cost-effective and efficient manner. While other factors like relevance, reliability, and objectivity are also critical foundations, "practicability" is the standard answer within this specific set of multiple-choice options for defining the adaptive nature of accounting guidelines.
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Why other options are incorrect
❌ B. Subjectivity: Accounting principles aim to eliminate personal bias and feelings. They are based on objectivity and verifiable facts rather than subjective judgments.
❌ C. Convenience in recording: While accounting systems aim for efficiency, principles are not established merely for the "convenience" of the bookkeeper. They are structured to ensure financial accuracy, transparency, and comparability for stakeholders.
❌ D. None of the above: This is incorrect because practicability is a recognized factor influencing the development and adoption of accounting standards.