Which one of the following statements best describes the concept of consistency?
A)When uncertainty exists, understating assets, overstating liabilities, accelerating recognition of losses, and delaying recognition of gains is preferred.
B)Accounting numbers are consistently market value.
C)Different firms use identical accounting measurement methods for similar events.
D)Similar events are measured using identical accounting procedures from period to period.

Question

Quizplus · Accepted Answer

The concept of consistency implies that similar events are measured using identical accounting procedures from period to period. This ensures comparability and consistency of financial information across time. Option A is incorrect as it suggests deliberate misrepresentation of financial information. Option B is incorrect as accounting numbers are not always based on market value. Option C is incorrect as firms may use different accounting methods and still comply with the principle of consistency as long as they apply the same method consistently from period to period.

Which One of the Following Statements Best Describes the Concept