Question

Match the following statement with the most applicable principle:

A business does a stocktake at the end of the year to verify stock levels	Answer 1Choose...Materiality Conservatism Reliability Comparability
Write down cost of inventory if value is much less	Answer 2Choose...Materiality Conservatism Reliability Comparability
Non significant information need not be reported separately	Answer 3 Choose...Materiality Conservatism Reliability Comparability
Disclosing methods used in valuing inventory Answer 3 Choose...Materiality Conservatism Reliability Comparability

Answer 1

STATEMENT	RESPECTIVE PRINCIPLE
A business does a stocktake at the end of the year to verify stock levels	Reliability Principle, as the business wants to know that the accounting data is reliable by going through physical stock.
Write down cost of inventory if value is much less	Conservatism Principle, which states to take into accounts any losses or expenses but ignores gain.
Non significant information need not be reported separately	Materiality Principle, according to which only material and significant information needs to be disclosed separately.
Disclosing methods used in valuing inventory	Comparability principle, in order to have the data be compared with past information.