What is consistency, Accounting Basics

Assignment Help:

Q. What is Consistency?

Consistency in general requires that a company use the same accounting principles and reporting practices through time. This concept disallows indiscriminate switching of accounting principles or methods such as changing inventory methods every year. But consistency doesn't prohibit a change in accounting principles if the information needs of financial statement users are better served by the change. When a company makes a alter in accounting principles it must make the following disclosures in the financial statements (a) nature of the change (b) reasons for the change (c) effect of the change on current net income, if significant and (d) cumulative effect of the change on past income.


Related Discussions:- What is consistency

Cash dividends across two accounting cycles, Recording and reporting stock ...

Recording and reporting stock transactions and cash dividends across two accounting cycles Davis Corporation was authorized to issue 100,000 shares of $10 par common stock and 5

Accounting, Accounting Accounting has evolved and emerged within respo...

Accounting Accounting has evolved and emerged within response to the social & economic requirement of the society. The accounting procedure has its own syntax. The primary sys

What is payroll?, Payroll implies with paying your employees (having seeing...

Payroll implies with paying your employees (having seeing that the government gets the monies they require you to withhold from the employees and the payroll taxes they needs you t

Graham maintains that formulation and implementation, Graham maintains that...

Graham maintains that formulation and implementation are phases in the strategic management process. Yolanda maintains that evaluation and estimation are also part of this proc

Accounting Standards, Write short notes on 5 modern accounting techniques

Write short notes on 5 modern accounting techniques

Requirements for accounting standards, The information contained in publish...

The information contained in published financial statements is of specific importance to external users, as shareholders and investors. Without any information they would not be ca

Show recording changes in assets, Q. Show Recording changes in assets? ...

Q. Show Recording changes in assets? Recording changes in assets, liabilities, and stockholders' equity While recording commerce transactions remember that the foundation of

Share-based payment transactions, Q. Share-based payment transactions? ...

Q. Share-based payment transactions? The fair value accounting standard SFAS 157 applies to monetary assets of all publicly-traded companies in the US as of 2007 Nov. 15. It as

Audit Reports, Why it is important for independent auditor to be a member o...

Why it is important for independent auditor to be a member of a professional body?

Open item managed account, What do you recognize by Open Item Managed Accou...

What do you recognize by Open Item Managed Account? Ans) Open item management make sures that all items that have not yet been cleared are available in the system. Only after ea

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