The Principle of Consistency States That

question 26

Multiple Choice

The principle of consistency states that:

• A) changes in accounting methods should occur from one fiscal period to the next.
• B) a company cannot change from one inventory valuation method to another.
• C) a company should switch from LIFO to FIFO every other period.
• D) by using the same inventory method from one fiscal period to another, the financial statements are more meaningful.

---

Definitions:

Rifted Apart

A geographical term describing the process by which tectonic plates move away from each other, creating rift valleys or separating landmasses.

Oceanic Plateau

A large, flat, elevated area of the seabed formed by volcanic activity, often found in the middle of ocean basins.

Hot Spot

A volcanic region thought to be fed by underlying mantle that is anomalously hot compared with the surrounding mantle.

Transform Boundary

A type of tectonic plate boundary where plates slide past each other horizontally, causing seismic activity.