Which principle or concept states that businesses should use the same accounting methods and procedures from period to period? a. Disclosure b. Conservatism c. Consistency d. Materiality

Question

Want to see more full solutions like this?

Answer 1

Textbook Question

Chapter 6, Problem 1QC

Which principle or concept states that businesses should use the same accounting methods and procedures from period to period?

a. Disclosure

b. Conservatism

c. Consistency

d. Materiality

Expert Solution & Answer

To determine

Accounting concepts and principles: Financial statements are prepared in accordance with the guidelines of “GAAP” (Generally Accepted Accounting principles). The main objective of GAAP is to protect the interest of the investors and ensure fair business practice.

To Find: The principle or concept states that businesses should use the same accounting methods and procedures from period to period.

Answer to Problem 1QC

(c) Consistency

Explanation of Solution

Explanation for correct answer:

Consistency principle states that the same accounting principle should be followed over a period of years. The accounting methods for valuation of assets, liabilities, and inventories should not be changed from period to period. There should be a consistency in the accounting method followed.

Explanation for incorrect answers:

Option (a) is incorrect because disclosure principle ensures, all financial information relating to the company are recorded; hence all financial information is reported.
Option (b) is incorrect because conservatism principle states that all uncertain financial expenses and losses but not uncertain future gains should be recorded to safeguard itself from any future financial difficulties. According to this convention, the anticipated losses in future are the losses for the company, but the anticipated gains are not considered profit for the company.
Option (d) is incorrect because materiality constraint focuses, on recording financial transactions which have a significant impact on the financial statement; hence it requires that the accounting standards must be followed for all items of significant size.

Conclusion

Therefore, the correct option is (c).

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

answer plz financial accounting

Need help with this financial accounting question

A fixed asset with a cost of $38,400 and accumulated depreciation of $29,200 is sold for $7,220. What is the amount of the gain or loss on disposal of the fixed asset?

Answer 2

Textbook Question

Chapter 6, Problem 1QC

Which principle or concept states that businesses should use the same accounting methods and procedures from period to period?

a. Disclosure

b. Conservatism

c. Consistency

d. Materiality

Expert Solution & Answer

To determine

Accounting concepts and principles: Financial statements are prepared in accordance with the guidelines of “GAAP” (Generally Accepted Accounting principles). The main objective of GAAP is to protect the interest of the investors and ensure fair business practice.

To Find: The principle or concept states that businesses should use the same accounting methods and procedures from period to period.

Answer to Problem 1QC

(c) Consistency

Explanation of Solution

Explanation for correct answer:

Consistency principle states that the same accounting principle should be followed over a period of years. The accounting methods for valuation of assets, liabilities, and inventories should not be changed from period to period. There should be a consistency in the accounting method followed.

Explanation for incorrect answers:

Option (a) is incorrect because disclosure principle ensures, all financial information relating to the company are recorded; hence all financial information is reported.
Option (b) is incorrect because conservatism principle states that all uncertain financial expenses and losses but not uncertain future gains should be recorded to safeguard itself from any future financial difficulties. According to this convention, the anticipated losses in future are the losses for the company, but the anticipated gains are not considered profit for the company.
Option (d) is incorrect because materiality constraint focuses, on recording financial transactions which have a significant impact on the financial statement; hence it requires that the accounting standards must be followed for all items of significant size.

Conclusion

Therefore, the correct option is (c).

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Textbook Question

Chapter 6, Problem 1QC

Which principle or concept states that businesses should use the same accounting methods and procedures from period to period?

a. Disclosure

b. Conservatism

c. Consistency

d. Materiality

Expert Solution & Answer

To determine

Accounting concepts and principles: Financial statements are prepared in accordance with the guidelines of “GAAP” (Generally Accepted Accounting principles). The main objective of GAAP is to protect the interest of the investors and ensure fair business practice.

To Find: The principle or concept states that businesses should use the same accounting methods and procedures from period to period.

Answer to Problem 1QC

(c) Consistency

Explanation of Solution

Explanation for correct answer:

Consistency principle states that the same accounting principle should be followed over a period of years. The accounting methods for valuation of assets, liabilities, and inventories should not be changed from period to period. There should be a consistency in the accounting method followed.

Explanation for incorrect answers:

Option (a) is incorrect because disclosure principle ensures, all financial information relating to the company are recorded; hence all financial information is reported.
Option (b) is incorrect because conservatism principle states that all uncertain financial expenses and losses but not uncertain future gains should be recorded to safeguard itself from any future financial difficulties. According to this convention, the anticipated losses in future are the losses for the company, but the anticipated gains are not considered profit for the company.
Option (d) is incorrect because materiality constraint focuses, on recording financial transactions which have a significant impact on the financial statement; hence it requires that the accounting standards must be followed for all items of significant size.

Conclusion

Therefore, the correct option is (c).

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 6, Problem 1QC

Which principle or concept states that businesses should use the same accounting methods and procedures from period to period?

a. Disclosure

b. Conservatism

c. Consistency

d. Materiality

Expert Solution & Answer

To determine

Accounting concepts and principles: Financial statements are prepared in accordance with the guidelines of “GAAP” (Generally Accepted Accounting principles). The main objective of GAAP is to protect the interest of the investors and ensure fair business practice.

To Find: The principle or concept states that businesses should use the same accounting methods and procedures from period to period.

Answer to Problem 1QC

(c) Consistency

Explanation of Solution

Explanation for correct answer:

Consistency principle states that the same accounting principle should be followed over a period of years. The accounting methods for valuation of assets, liabilities, and inventories should not be changed from period to period. There should be a consistency in the accounting method followed.

Explanation for incorrect answers:

Option (a) is incorrect because disclosure principle ensures, all financial information relating to the company are recorded; hence all financial information is reported.
Option (b) is incorrect because conservatism principle states that all uncertain financial expenses and losses but not uncertain future gains should be recorded to safeguard itself from any future financial difficulties. According to this convention, the anticipated losses in future are the losses for the company, but the anticipated gains are not considered profit for the company.
Option (d) is incorrect because materiality constraint focuses, on recording financial transactions which have a significant impact on the financial statement; hence it requires that the accounting standards must be followed for all items of significant size.

Conclusion

Therefore, the correct option is (c).

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Accounting concepts and principles: Financial statements are prepared in accordance with the guidelines of “GAAP” (Generally Accepted Accounting principles). The main objective of GAAP is to protect the interest of the investors and ensure fair business practice.

To Find: The principle or concept states that businesses should use the same accounting methods and procedures from period to period.

Answer to Problem 1QC

(c) Consistency

Explanation of Solution

Explanation for correct answer:

Consistency principle states that the same accounting principle should be followed over a period of years. The accounting methods for valuation of assets, liabilities, and inventories should not be changed from period to period. There should be a consistency in the accounting method followed.

Explanation for incorrect answers:

Option (a) is incorrect because disclosure principle ensures, all financial information relating to the company are recorded; hence all financial information is reported.
Option (b) is incorrect because conservatism principle states that all uncertain financial expenses and losses but not uncertain future gains should be recorded to safeguard itself from any future financial difficulties. According to this convention, the anticipated losses in future are the losses for the company, but the anticipated gains are not considered profit for the company.
Option (d) is incorrect because materiality constraint focuses, on recording financial transactions which have a significant impact on the financial statement; hence it requires that the accounting standards must be followed for all items of significant size.

Conclusion

Therefore, the correct option is (c).

Answer 8

Expert Solution & Answer

To determine

Accounting concepts and principles: Financial statements are prepared in accordance with the guidelines of “GAAP” (Generally Accepted Accounting principles). The main objective of GAAP is to protect the interest of the investors and ensure fair business practice.

To Find: The principle or concept states that businesses should use the same accounting methods and procedures from period to period.

Answer to Problem 1QC

(c) Consistency

Explanation of Solution

Explanation for correct answer:

Consistency principle states that the same accounting principle should be followed over a period of years. The accounting methods for valuation of assets, liabilities, and inventories should not be changed from period to period. There should be a consistency in the accounting method followed.

Explanation for incorrect answers:

Option (a) is incorrect because disclosure principle ensures, all financial information relating to the company are recorded; hence all financial information is reported.
Option (b) is incorrect because conservatism principle states that all uncertain financial expenses and losses but not uncertain future gains should be recorded to safeguard itself from any future financial difficulties. According to this convention, the anticipated losses in future are the losses for the company, but the anticipated gains are not considered profit for the company.
Option (d) is incorrect because materiality constraint focuses, on recording financial transactions which have a significant impact on the financial statement; hence it requires that the accounting standards must be followed for all items of significant size.

Conclusion

Therefore, the correct option is (c).

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Accounting concepts and principles: Financial statements are prepared in accordance with the guidelines of “GAAP” (Generally Accepted Accounting principles). The main objective of GAAP is to protect the interest of the investors and ensure fair business practice.

To Find: The principle or concept states that businesses should use the same accounting methods and procedures from period to period.

Answer 12

Answer to Problem 1QC

(c) Consistency

Answer 13

Explanation of Solution

Explanation for correct answer:

Consistency principle states that the same accounting principle should be followed over a period of years. The accounting methods for valuation of assets, liabilities, and inventories should not be changed from period to period. There should be a consistency in the accounting method followed.

Explanation for incorrect answers:

Option (a) is incorrect because disclosure principle ensures, all financial information relating to the company are recorded; hence all financial information is reported.
Option (b) is incorrect because conservatism principle states that all uncertain financial expenses and losses but not uncertain future gains should be recorded to safeguard itself from any future financial difficulties. According to this convention, the anticipated losses in future are the losses for the company, but the anticipated gains are not considered profit for the company.
Option (d) is incorrect because materiality constraint focuses, on recording financial transactions which have a significant impact on the financial statement; hence it requires that the accounting standards must be followed for all items of significant size.

Answer 14

Conclusion

Therefore, the correct option is (c).

Answer 15

Ch. 6 - Which principle or concept states that businesses...Ch. 6 - Which inventory costing method assigns to ending...Ch. 6 - Assume Nile.com began April with 14 units of...Ch. 6 - Suppose Nile.com used the weighted-average...Ch. 6 - Which inventory costing method results in the...Ch. 6 - Prob. 6QC Ch. 6 - 7. At December 31, 2018, Stevenson Company...Ch. 6 - Suppose Maestros had cost of goods sold during the...Ch. 6 - Suppose Nile.com used the LIFO inventory costing...Ch. 6 - Prob. 1RQ

Which principle or concept states that businesses should use the same accounting methods and procedures from period to period? a. Disclosure b. Conservatism c. Consistency d. Materiality

Videos

Answer to Problem 1QC

Explanation of Solution

Want to see more full solutions like this?

Chapter 6 Solutions