Under the historical cost convention, balance sheet items are recorded at original cost and are not adjusted for inflation or changes in price level. Hence option (c) is not true. The other three statements correctly describe the nature and limitations of financial statements.
Which one of the following is not true?
CUET UG 2022 — Accountancy Financial Statements
2022mcqmedium
Which one of the following is not true?
Official previous-year question
Held on 8 Aug 2022 · Verified 13 Jul 2026.
Options
- A
Financial statements are prepared on the basis of accounting principles and conventions.
- B
Any changes in accounting principles or methods will affect the utility of the financial statements.
- C
During the period of high inflation, the amounts associated with the items of balance sheet are adjusted to current price level.
- D
Financial statements record only those transactions which can be expressed in monetary units only.
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