The ............. convention states that the method of providing depreciation adopted in one year should be adopted each year :-
Full disclosure
Consistency
Prudence
Materiality
Answers
Answer:
The concept states that if straight line method of depreciation is used in one year, then it should also be used in the next year.
Answer:
Consistency.
Explanation:
The accounting information provided by the financial statements would be useful in drawing conclusions regarding the working of an enterprise only when it allows comparisons over a period of time as well as with the working of other enterprises.
The accounting information provided by the financial statements would be useful in drawing conclusions regarding the working of an enterprise only when it allows comparisons over a period of time as well as with the working of other enterprises. Thus, both inter-firm and inter-period comparisons are required to be made. This can be possible only when accounting policies and practices followed by enterprises are uniform and are consistent over the period of time.
The accounting information provided by the financial statements would be useful in drawing conclusions regarding the working of an enterprise only when it allows comparisons over a period of time as well as with the working of other enterprises. Thus, both inter-firm and inter-period comparisons are required to be made. This can be possible only when accounting policies and practices followed by enterprises are uniform and are consistent over the period of time.Hence, the consistency concept states that, if Straight Line Method of depreciation is used in one year, then it should also be used in the next year.