The Convention of Consistency Refers to Consistent Use of Accounting

question 239

Multiple Choice

The convention of consistency refers to consistent use of accounting principles

• A) among firms.
• B) among accounting periods.
• C) throughout the accounting periods.
• D) within industries.

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Definitions:

Earnings per Share

A financial ratio that measures the amount of net income earned per share of common stock. It is an indicator of a company's profitability.

Dividend Payout Ratio

The proportion of earnings a company pays to its shareholders in the form of dividends, expressed as a percentage of the company's total earnings.

Book Value per Share

A measure of the net asset value of a company allocated to each outstanding share.

Return on Total Assets

A financial ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets.