Consistency principle, Accounting Basics

Assignment Help:

A company has been depreciating its IT equipment over 5 (five )years, but now finds that it is becoming obsolete in 3 years.  

What does the consistency principle allow the company to do?

A. change depreciation policy to 3 years and highlight the effect of this in its financial statements

B. change depreciation policy to 3 years without indicating the effect on profits

C. continue to depreciate over 5 years according to the existing policy

D. continue to depreciate over 5 years but note that after 3 years the equipment will be obsolete

 


Related Discussions:- Consistency principle

Accounting as an information system, As discussing the scope of accounting ...

As discussing the scope of accounting you should have observed here the accounting involves a sequence of activities connected with each other, starting along with the collecting,

Accounts for managers, 1. From the following information, prepare a Balance...

1. From the following information, prepare a Balance Sheet showing the workings: 1. Working Capital ` 75,000 2. Reserves and Surplus ` 1,00,000 3. Bank Overdraft ` 60,000 4. Curren

What is owner equity, What is OWNER'S EQUITY Difference between Liabili...

What is OWNER'S EQUITY Difference between Liabilities and Assets is Owner's Equity. The can also be known as capital, proprietorship, or net worth.

Computer based process solutions for accounts, Process Solutions provides a...

Process Solutions provides a computer-based document processing service. The accountant has produced the following analysis.   Standard Modifi

Parternship, formation of partnership and changes in constitution of parter...

formation of partnership and changes in constitution of parternship

Accounting, briefly explain the accounting concepts which guide the account...

briefly explain the accounting concepts which guide the accountant at the recording stage

#title.blessing., Implication of applying accounting concept wrongly

Implication of applying accounting concept wrongly

Accounting concept, define accounting. Explain the accounting concepts whic...

define accounting. Explain the accounting concepts which guide the accountant at the recording stage.

Maximum cca , Home Inc. is considering buying a new piece of equipment, whi...

Home Inc. is considering buying a new piece of equipment, which will cost $715,000 and has an economic life of 5 years, in order to make a new line of product.  The company believe

Explain about traditional accounting theory, Q. Explain about Traditional a...

Q. Explain about Traditional accounting theory? Conventional accounting theory consists of underlying assumptions rules of measurement major principles and modifying convention

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd