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

What are the break-even levels of ebit, John is considering the best capita...

John is considering the best capital structure for his firm. Suppose there are two capital structures for him to choose from. Structure A would have 7,000 shares of stock and $160,

Example of sales cycle of company, Q. Example of sales cycle of company? ...

Q. Example of sales cycle of company? For several retailers a large percentage of their annual sales occur during the period from Thanksgiving to Christmas. They efforts to sto

Understand how to account for transportation costs, Q. Understand how to ac...

Q. Understand how to account for transportation costs? FOB terms are particularly important at the end of an accounting period. Goods in transit after that belong to either the

Explain about business entity concept, Q. Explain about business entity con...

Q. Explain about business entity concept? A business entity perhaps made up of several different legal entities. For example a large business such as General Motors Corporation

Accounting concepts, implication of applying accounting concepts

implication of applying accounting concepts

Explain about cash equivalents, Q. Explain about Cash equivalents? Cash...

Q. Explain about Cash equivalents? Cash equivalents are highly liquid short-term investments obtained with temporarily idle cash and easily convertible into a known cash amount

An accounting perspective business insight, An accounting perspective Busin...

An accounting perspective Business insight Accounting is essential for all three types of business organizations and every company must follow generally accepted accounting pri

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?

Estimate interest rate and analysis market interest, Woodie Limited issues ...

Woodie Limited issues $5 million in convertible bonds on 1 July 2012. They are issued at the fair value and pay an interest rate of 4 percent. The interest is paid at the end of 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