Which Statement Relating to Comparability Is Correct

question 22

Multiple Choice

Which statement relating to comparability is correct?

• A) It means a company can never change an accounting method.
• B) It means all firms in the same industry should use the same accounting methods.
• C) It means the same depreciation method must be employed for all classes of non-current assets.
• D) It requires an entity, as far as possible, to use the same accounting method from year to year.

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Definitions:

State Law

The body of law enacted by the legislative branch of a state government or established by its judiciary.

Monopsony

A market condition where there is only one buyer for a product or service, giving them greater power over sellers.

Labor Demand Curve

A graphical representation showing the relationship between the quantity of labor demanded by employers and the wage rate.

Equilibrium Wage

The wage rate at which the quantity of labor firms wish to hire equals the quantity of labor workers wish to supply in the labor market.