Match List I with List II.

List I (Accounting Concepts)		List II (Purpose/Applicability)
A.	Going Concern Concept	I.	The same accounting method used by a firm from one period to another
B.	Consistency	II.	Relate to the relative size or importance of an item or event
C.	Cost concept	III.	This an inappropriate assumption for a firm undergoing bankruptcy
D.	Materiality	IV.	The normal basis used to account for assets

Choose the correct answer from the options given below: 

Accounting Concepts

Purpose/Applicability

• The going concern concept prescribes that accountants prepare financial statements on the assumption that a business may continue its operations for the foreseeable future.
• Under this concept, the definition of a foreseeable future is 12 months from the end date of the reporting period.
• This an inappropriate assumption for a firm undergoing bankruptcy

• It states that businesses should maintain the same accounting methods or principles throughout the accounting periods so that users of the financial statements or information can make meaningful conclusions from the data.
• The same accounting method used by a firm from one period to another
• It means The normal basis used to account for assets

• The historical cost concept states that a business may record assets and liabilities at their historical cost rather than their current market or sale value.
• It helps to maintain consistent, reliable, and verifiable financial information. Including the current value of an entity can result in financial irregularities.
• This an inappropriate assumption for a firm undergoing bankruptcy

Materiality 

• The materiality concept prescribes guidelines to identify if a piece of financial information is material and whether it can influence the person reading a company's financial statements.
• Based on this concept, an accountant or a business may remove negligible transactions that may not have a bearing on final accounts.
• It Relates to the relative size or importance of an item or event