The Consistency Principle States That Businesses Should Use the Same

question 125

True/False

The consistency principle states that businesses should use the same accounting methods from period to period.

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Definitions:

Rank Portfolios

The process of organizing investment portfolios in order of performance, risk, or any other relevant criteria.

Sharpe Measure

A metric to assess the performance of an investment by adjusting for its risk, calculating the difference between the returns of the investment and the risk-free rate, divided by the investment's standard deviation.

Passive Strategy

An investment strategy that aims to match, rather than outperform, market returns by mimicking the investment holdings of a particular index.

Benchmark Portfolio

A standard or point of reference against which the performance of an investment portfolio can be measured.