Each of the statements below violates a convention in accounting. State which of the following accounting conventions is violated: comparability and consistency, materiality, conservatism, full disclosure, or cost-benefit.

1. A series of reports that are time-consuming and expensive to prepare are presented to the board of directors each month, even though the reports are never used.

2. A company changes its method of accounting for depreciation.

3. The company in 2 does not indicate in the financial statements that the method of depreciation was changed; nor does it specify the effect of the change on net income.

4. A company’s new office building, which is built next to the company’s existing factory, is debited to the Factory account because it represents a fairly small dollar amount in relation to the factory.

5. The asset account for a pickup truck still used in the business is written down to what the truck could be sold for, even though the carrying value under conventional depreciation methods is higher.

Classification of Accounts: Balance Sheet