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Consistency Concept says you must use the same (inventory costing) method so financial statements can be...

Consistency Concept says you must use the same (inventory costing) method so financial statements can be compared from one period to the next period. Group of answer choices

True or false

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Answer #1

The Concept of Consistency means that the accounting methods once adopted by an organisation must be the same in the future i.e. the organisation must be consistent with this.

It means that the Organisation shall not change the accounting policy if there are no reasonable grounds. In case, there are reasonable grounds the change in the policy and effect due to change in the policy must be disclosed in the Financial Statements.

In other words, Consitency prescribes use of same accounting method over the periods.

Hence, Consistency Concept says you must use the same (inventory costing) method so financial statements can be compared from one period to the next period.

The Statement is TRUE

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