Question

Write a brief note on ‘Consistency’ assumption.

Answer 1

The concept of consistency means that accounting methods once adopted must be applied consistently in future.

-Consistency concept is important because of the need for comparability, that is, it enables investors and other users of financial statements to easily and correctly compare the financial statements of a company.

Answer 2

Explanation:

The consistency convention implies that the accounting policies must be followed consistently from one accounting period to another. The results of different years will be comparable only when same accounting policies are followed from year to year.

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