Tavella Company applies the consistency convention.What does this mean?
A) Tavella Co.uses the same names for all its expenses as its competitors.
B) Tavella Co.has selected certain accounting principles that can never be changed.
C) Tavella Co.applies the same accounting principles each accounting period.
D) Tavella Co.applies the same accounting principles as it competitors.

Question

Quizplus · Accepted Answer

The consistency convention means that a company applies the same accounting principles and methods consistently from one accounting period to the next. This ensures that financial statements can be compared across different periods and are reliable for decision-making. It does not necessarily mean using the same names for expenses or using the same accounting principles as competitors. Therefore, the best choice is C.

Tavella Company Applies the Consistency Convention