Accounting changes are often made and the monetary impact is reflected in the financial statements of a company even though, in theory, this may be a violation of the accounting concept of
A) materiality.
B) consistency.
C) conservatism.
D) objectivity.

Question

Quizplus · Accepted Answer

The accounting concept of consistency states that a company should use the same accounting methods and principles from one period to another. However, if changes must be made, they should be disclosed and explained. Therefore, accounting changes can be made as long as they are disclosed and explained in the financial statements. Thus, making accounting changes is not a violation of materiality, conservatism, or objectivity but is a violation of consistency concept.

Accounting Changes Are Often Made and the Monetary Impact Is