Following the Consistency Principle, Once a Firm Adopts a Method

question 79

True/False

Following the consistency principle, once a firm adopts a method of inventory valuation, it should use that method consistently from one period to the next.

---

Definitions:

Unearned Revenue

Income received by a company for goods or services that have not yet been delivered or performed; it is recorded as a liability on the balance sheet until the goods or services are provided.

Rental Payments

Periodic payments made by a lessee to a lessor for the use of an asset.

Received

A term denoting that something has been accepted or collected, often used in financial transactions or in the acknowledgment of messages or goods.

Adjusting Entry

An accounting journal entry made at the end of an accounting period to allocate income and expenditures to the appropriate period.