Financial information exhibits the characteristic of consistency when
A) accounting procedures are adopted which smooth net income and make results consistent between years.
B) extraordinary gains and losses are shown separately on the income statement.
C) accounting entities give similar events the same accounting treatment each period.
D) expenditures are reported as expenses and netted against revenue in the period in which they are paid.

Question

Quizplus · Accepted Answer

Consistency means that accounting entities give similar events the same accounting treatment each period. This ensures that financial information is comparable across different periods, which is important for decision-making purposes. A, B, and D do not explain consistency in financial information.

Financial Information Exhibits the Characteristic of Consistency When