Which of the following statements about consistency is true?
A) A company has to use the same accounting methods in all parts of a company.
B) The same depreciation method should be employed for all assets of a company.
C) The same accounting methods must be used as those used by other companies in the industry.
D) The same accounting methods must be used from year to year,except where a change is made and the impact on profit is disclosed.

Question

Quizplus · Accepted Answer

Consistency in accounting refers to using the same accounting methods and treatments from year to year, unless a change is made and the impact on profit is disclosed. This ensures that financial statements are comparable over time and helps users make informed decisions. While it is recommended to use industry standards and best practices, it is not a requirement for consistency. Different assets may require different depreciation methods based on their useful life and wear and tear, so it is not necessary to use the same method for all assets in a company.

Which of the Following Statements About Consistency Is True