Multiple choice

Consistency with reference to an application of accounting principles refers to the fact that

  1. companies in the same industry use identical accounting procedures and methods and are consistent

  2. income of the assets have not been overstated

  3. accounting methods and procedures used have been consistently applied from year to year

  4. all accounting methods and procedures have been utilised
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The consistency principle requires that a company use the same accounting methods and procedures from one accounting period to the next, enabling comparability of financial statements over time. Option A incorrectly describes uniformity across different companies rather than consistency over time periods within the same company.

Keep practicing — related questions