Financial information exhibits the characteristic of consistency when
A)expenses are reported as charges against revenue in the period in which they are paid.
B)accounting entities give accountable events the same accounting treatment from period to period.
C)extraordinary gains and losses are not included on the income statement.
D)accounting procedures are adopted which give a consistent rate of net income.

Question

Quizplus · Accepted Answer

Consistency refers to using the same accounting treatment for similar events from one period to another. This creates consistency in financial reporting and allows for easier comparison of financial statements over time. Option A refers to the matching principle, option C refers to items that are considered unusual or infrequent, and option D refers to the concept of conservatism.

Financial Information Exhibits the Characteristic of Consistency When