Question

The policy of adopting the same accounting practices and methods every year is due to convention of

Answer 1

Consistency is a basic assumption of accounting and it is assumes that, the various policies and methods adopted by the concern while preparing the accounts, are to be consistent from one period to another.

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.

This can be possible only when accounting policies and practices followed by enterprises are uniform and are consistent over the period of time.