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CA Intermediate · Advanced Accounting · AS 1 Disclosure of Accounting Policies

Which of the following is a consideration in selecting and applying accounting policies under AS 1, so that the financial statements present a true and fair view?

AS 1 identifies prudence, substance over form and materiality as the major considerations in selecting and applying accounting policies, so that the financial statements give a true and fair view of the state of affairs and the profit or loss.

  1. AMateriality, prudence and substance over formCorrect
  2. BComparability, simplicity and tax neutrality
  3. CConservatism, uniformity and cost saving
  4. DProfit smoothing, prudence and disclosure of all items

Explanation

AS 1 names prudence, substance over form and materiality as the major considerations governing the selection and application of accounting policies. The other options include items that are not listed in AS 1.

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