The Accounting Principle That Requires the Same Depreciation Method or Inventory

question 22

Multiple Choice

The accounting principle that requires the same depreciation method or inventory valuation method to be used over consecutive accounting periods is:

• A)conservatism.
• B)consistency.
• C)reliability.
• D)historical cost.

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Definitions:

Compounded Semi-annually

A financial term indicating the interest on an investment is calculated and added to the principal balance twice every year, enhancing the total return over periods.

Obligation

A duty or commitment to pay money or perform some action.

Equivalent

Equal in value, amount, function, meaning, or status; often used in mathematics to describe expressions or amounts that are the same when compared or evaluated.

Compounded Quarterly

Refers specifically to the computation of interest at four intervals in a year, on the initial investment alongside the interest from preceding periods.