Which accounting practice best demonstrates consistency?
Correct answer: B. Applying the same accounting method from period to period
- A. Changing inventory methods whenever profit falls
- B. Applying the same accounting method from period to period
- C. Recording all costs only when cash is paid
- D. Recognising expected gains before they occur
Explanation
Consistency means applying accounting methods in the same manner across accounting periods, unless a justified change is needed. The other choices describe manipulation or different accounting bases.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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