The Consistency Principle States That a Business Should Use the Same

question 92

True/False

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

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Definitions:

No-par Stock

Stock issued without a par value specified in the corporate charter or on the stock certificate.

Minimum Legal Capital

The least amount of capital that a company is required to maintain by law, to protect creditors from the company's liabilities.

Convertible Stock

Equity securities that can be converted into a predetermined number of common shares, at the option of the holder.

Callable Stock

A type of security that gives the issuer the right to buy back the shares at a predetermined price after a certain period.