The Principle of Consistency States That

question 57

Multiple Choice

The principle of consistency states that:

• A)companies should choose a set of accounting methods and use them from one period to the next.
• B)once a company selects an accounting method, it must use that method throughout the company's entire existence.
• C)a company may change any accounting method, provided the SEC approves the change.
• D)companies should elect to use methods that consistently inflate profits.

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Definitions:

Total Current

The overall flow of electric charge through a circuit, determined by the sum of all individual current paths within the circuit.

Parallel Circuit

An electric circuit in which the same voltage is applied across multiple paths, allowing current to divide among the paths.

Inductive Reactance

The opposition to the change in current flow in a circuit element caused by its inductance, affecting the phase angle between voltage and current in AC circuits.

Reactive Power

The component of electric power that oscillates between the source and load, associated with the energy stored in the field of an inductor or capacitor.