The Principle of Consistency States That

question 94

Multiple Choice

The principle of consistency states that:

• A)Companies are prohibited from ever changing their accounting methods.
• B)Every company in the same industry must use the same accounting principle.
• C)There must be a consistent blend to the accounting principles.
• D)If changes in accounting principles are made,the reasons for the change and the effects on the company's net income must be disclosed.

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Definitions:

U.K. Bills

Short-term debt securities issued by the United Kingdom government, used to fund its operations and manage its money supply.

Exchange Rate

The value of one currency for the purpose of conversion to another, determining how much one currency is worth in terms of another.

U.S. Investor

An individual or entity based in the United States that allocates capital with the expectation of receiving financial returns.

Treynor Measure

A performance metric for determining how well an investment portfolio has compensated the investor for taking risk, adjusted for market volatility.