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:

Substitution Effect

The economic principle that describes how consumers react to changes in price by replacing more expensive items with less costly alternatives.

Oranges

A citrus fruit known for its sweet taste and high vitamin C content, often consumed fresh, juiced, or used in cooking and baking.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers over a period of time.

Money Income

The number of dollars a person receives per period, such as $400 per week.