The principle of consistency states that:

Question

Quizplus · Accepted Answer

The principle of consistency states that by using the same accounting methods from one period to another, the financial statements are more meaningful and comparable for users. This principle ensures that changes in financial statements are due to actual operational events and not changes in accounting methods. Therefore, Option D is the correct choice. Options A and C are incorrect because they suggest changes in accounting methods, which are not consistent with this principle. Option B is also not correct because companies can change inventory valuation methods if the change is appropriately disclosed and justified.

The Principle of Consistency States That