According to this principle, the accounting policies, assumption, concepts used in accounting should not change form period to period.
This enable the accountant to compare the results among different accounting period.
For e.g.. Depreciation can be provided in different methods such as Straight line method or Written down value method etc., whichever method is applied it should be followed consistently.
This principle does not prohibits the change in accounting policy/method. In case of changes in any accounting policy/methods it should be clearly disclosed in the financial statement in the form of foot notes.
Test Your Skills
Test Your Skills Now!
This is only a practice test, it is designed to help you revise your concepts
The test contains questions, only 1 option is correct for each question
This is a timed test.
After you have finished the test, press on the 'Finish Test' button to know your score and get the correct answers