Which Statement Relating to Comparability Is True

question 7

Multiple Choice

Which statement relating to comparability is true?

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

---

Definitions:

Record Sale

To record a sale refers to the process of documenting a sales transaction in the accounting books, acknowledging the exchange of goods or services for payment.

Revenue Journal

A revenue journal is an accounting ledger that records sales transactions where a business earns revenue, typically used in a manual accounting system.

Segment Data

Financial information that is broken down into sub-parts of a company, such as departments or product lines, to analyze performance and make strategic decisions.

GAAP

Generally Accepted Accounting Principles, a set of rules and standards for financial accounting and reporting in the U.S.