Briefly explain"principal of consistency"and principal of prudence"and give two examples for each principal
Answers
Explanation:
The consistency principle states that once you decide on an accounting method or principle to use in your business, you need to stick with and follow this method or principle consistently throughout your accounting periods.When doing your accounting, there are a number of different methods or principles that accountants can use. These principles are laid out for businesses to comply with when reporting their financial activity.
The consistency principle is one of the guidelines and standards which businesses are required to follow according to the accounting principles listed under UK GAAP .Why do we use the consistency principle?
The sole purpose of the consistency principle, or consistency concept, is to ensure that transactions or events are recorded in the same way, from one accounting year to the next.