Tavella Company Applies the Consistency Convention

question 33

Multiple Choice

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.

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Definitions:

Domestic Investment

The total capital expenditure on physical assets (like buildings, machinery, and equipment) within a country's borders to produce goods and services.

Net Capital Outflow

The net flow of funds invested abroad by a country, over a specific time period, typically calculated as the difference between domestic savings and investment.

GDP

Gross Domestic Product (GDP) is the total monetary value of all goods and services produced within a country's borders in a specific time period, serving as a broad indicator of economic health.

Consumption Expenditures

The total amount spent by consumers on goods and services.