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:

Wealth

The total value of all financial assets and resources owned by an individual or entity, minus any liabilities.

Risk Averse

A description of an individual or entity that prefers to avoid risk and chooses options that have lower uncertainty and potential for loss.

Von Neumann-Morgenstern

A theory of expected utility, which provides a foundation for making rational decisions under uncertainty.

Probability

The quantification of the probability of an event happening, represented by a numerical value ranging from 0 to 1.