Question

Accounting standards ensures consistency and comparability of financial statements. (True / False)​

Answer 1

Answer:

True

Explanation:

Answer 2

Answer:

Yes, true Accounting standards ensures consistency and comparability of financial statements.

Explanation:

1. Accounting standards are those rules, guidelines and principles derived from experience and practice when they are useful to accounting.
2. If any principles possess all the above characteristics and they are accepted by all then they are known as Accounting Standards.  
3. Accounting standards have been developed from various agencies, out of which most of the bodies are related to accounting.
4. ICAI & AICPA have done a commendable jobs in creating Accounting standards.
5. Some examples of accounting standards are as follows :

1. AS 1 Disclosure of Accounting Policies
2. AS 2 Valuation of inventories
3. AS 3 Cash flow statement
4. AS 4  Contingencies and Events Occurring After Balance Sheet
5. AS 5  Net profit or Loss for the period, Prior Period Items and Changes in Accounting Policies
6. AS 6 Depreciation
7. AS 13 Amalgamation
8. AS 19 Leases
9. AS 20 earning per share
10. AS 16 borrowing cost

thus it is true that Accounting standards ensures consistency and comparability of financial statements.

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