The consistency principle
A) Requires a company to use the same accounting methods period after period
B) Requires a company to use one cost flow assumption exclusively
C) Allows a company to change its cost flow assumption period after period in order to maximize net income
D) Is also called the matching principle
E) Allows a company to change its cost flow assumption period after period in order to minimize income taxes

Question

Quizplus · Accepted Answer

The consistency principle requires a company to use the same accounting methods period after period to ensure that financial statements are comparable over time. This includes using the same cost flow assumption, among other accounting methods. Changing accounting methods frequently can lead to confusion and make it difficult to compare financial statements from different periods.

The Consistency Principle