Financial information exhibits the characteristic of consistency when
A) expenses are reported as charges against revenue in the period in which they are paid.
B) a company applies the same accounting treatment to similar events, from period to period.
C) extraordinary gains and losses are not included on the income statement.
D) accounting procedures are adopted which give a consistent rate of net income.

Question

Quizplus · Accepted Answer

Consistency refers to the application of the same accounting treatment to similar events, from period to period. This helps ensure that financial statements are comparable between periods and that any changes in a company's financial position or performance can be more accurately measured. A, C, and D do not accurately describe consistency in financial reporting.

Financial Information Exhibits the Characteristic of Consistency When