The consistency principle is mandated by:
A)the IRS.
B)the SEC.
C)GAAP.
D)the federal government.

Question

Quizplus · Accepted Answer

The consistency principle is a fundamental accounting principle under GAAP (Generally Accepted Accounting Principles). It requires a company to use the same accounting methods and procedures from period to period unless there is a valid reason to change them. This ensures comparability and consistency in financial reporting, which is essential for making informed decisions. The IRS (Internal Revenue Service) and SEC (Securities and Exchange Commission) may also require consistency in some situations, but the primary mandate for this principle comes from GAAP. The federal government does not have a direct role in mandating accounting principles, but it may establish legal requirements that affect financial reporting.

The Consistency Principle Is Mandated By