Consistency is best demonstrated when
A) expenses are reported as charges against the period in which incurred.
B) the effect of changes in accounting methods is properly disclosed.
C) extraordinary gains and losses are not reported on the income statement.
D) accounting procedures are adopted which give a consistent rate of net income.

Question

Quizplus · Accepted Answer

Consistency in accounting refers to the use of the same accounting methods or principles from one period to the next, to ensure comparability of financial statements over time. The effect of changes in accounting methods is properly disclosed to maintain this consistency, as it allows users of financial statements to understand the basis on which the financial statements are prepared and to compare them across different periods even when changes are made.

Consistency Is Best Demonstrated When