Which Statement Addresses the Consistency Characteristic of Accounting Information

question 66

Multiple Choice

Which statement addresses the consistency characteristic of accounting information?

• A)Companies in the same industry must use the same inventory costing method to facilitate comparison of results.
• B)Financial reporting practices in one country should be consistent with those in other countries.
• C)Businesses should generally use the same accounting methods and procedures from one period to the next.
• D)Once a company selects an inventory costing method, it must always use that method.

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Definitions:

Units-Of-Output

A depreciation method that allocates the cost of an asset based on the number of units it produces.

Straight-Line

A method of calculating depreciation of an asset by evenly spreading the cost over its useful life.

Depreciable Cost

The total cost of an asset that is subject to depreciation, which includes the purchase price, import duties, transport costs, installation charges, and other expenses, less its salvage value.

Straight-Line Rate

A method of calculating depreciation expense for an asset, spreading its cost evenly over its estimated useful life.