GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Convention of materiality
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Convention of consistency
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Convention of conservatism
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Convention of full disclosure
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Detailed explanation-1: -Consistency concept states that accounting procedures and practices should remain same from year to year. Consistency requires that a company’s financial statements follow the same accounting principles, methods, practices and procedures from one accounting period to the next.
Detailed explanation-2: -In general, accounting policies are not changed, since doing so alters the comparability of accounting transactions over time. Only change a policy when the update is required by the applicable accounting framework, or when the change will result in more reliable and relevant information.
Detailed explanation-3: -Convention of consistency states that the same accounting methods should be adopted every year in preparing financial statements.