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:

Cournot Duopoly

Cournot Duopoly is a market structure where two firms control the market and compete on output levels, assuming the other's output is fixed while deciding their own.

Price

The sum of money needed to buy a product or service.

Long Run

A period in which all factors of production and costs are variable, allowing for all inputs to be adjusted.

Profit Maximizing

The process of identifying the best quantity and price to maximize a firm's profits.