The consistency concept:
A) Is also called the full disclosure principle.
B) Is also called the matching principle.
C) Requires a company to use one method of inventory valuation exclusively.
D) Prescribes a company use the same accounting method of inventory valuation, an exception being when a change from one method to another will improve its financial reporting.
E) Requires that all companies in the same industry use the same accounting methods of inventory valuation.

Question

Quizplus · Accepted Answer

The consistency concept prescribes a company use the same accounting method of inventory valuation, with an exception being when a change from one method to another will improve its financial reporting. This means that a company should use one method consistently over time, but may make a change if it will result in more accurate financial reporting. Therefore, choice D is the correct answer.

The Consistency Concept