Consistency in accounting principle, Accounting Basics

Assignment Help:

Q. Consistency in accounting principle?

Consistency necessitates that a company use the same accounting principles and reporting practices through time. Consistency makes possible comparability of financial information for a single company through time. Comparability between companies is more complicated because they may account for the same activities in different ways. For instance Company B may perhaps use one method of depreciation while Company C accounts for an identical asset in similar circumstances using another method. A high degree of inter-company comparability in accounting information doesn't exist unless accountants are required to account for the same activities in the same manner across companies and through time.

Accountants should consider one pervasive constraint and one threshold for recognition in providing useful information. First the benefits secured as of the information must be greater than the costs of providing that information. Second only material items require be disclosed and accounted for strictly in accordance with generally accepted accounting principles (GAAP).


Related Discussions:- Consistency in accounting principle

Preparing financial statements for a merchandising business, Preparing fina...

Preparing financial statements for a merchandising business (The statements are completed in this order.) 1.  Income Statement (contains only expenses and revenue and show

Bill for services, You have been asked to ready a bill for services. What i...

You have been asked to ready a bill for services. What information should be contained in the bill? Ans) Service Provider's Details (i.e) Organization name and address. Ser

What is estimated useful life, Q. What is Estimated useful life? The es...

Q. What is Estimated useful life? The estimated useful life of an asset is the approximate time that a company can use the asset. Useful life is estimation not an exact measure

Calculate the profit using balance sheet, Part 1 (a) Name and describe ...

Part 1 (a) Name and describe the three concepts that form the basis of double entry bookkeeping, and explain how they form the basis of double entry bookkeeping. (b) How doe

Explain the accounting concepts, Question 1 Write a short note on the foll...

Question 1 Write a short note on the following with example a. Activating budgets b. Reversing journals c. Memorandum vouchers d. Optional vouchers e. Creating Bill of Materials

Income statement , Astra Company sells financial calculators and offers ins...

Astra Company sells financial calculators and offers instruction on their use. During its first year it expects to sell 3000 calculators at $30 each and offer 5000 hours of instruc

What do you mean by return on investment, Q. What do you mean by Return on ...

Q. What do you mean by Return on investment? Return on investment (ROI) -- a measure of efficiency and effectiveness with that managers use resources available to them, express

Explain about purchase discounts, Q. Explain about Purchase discounts? ...

Q. Explain about Purchase discounts? Purchase discounts frequently companies purchase merchandise under credit terms that permit them to deduct a stated cash discount if they p

Treasurer, Treasurer: He is the custodian arid manager of each cash and ne...

Treasurer: He is the custodian arid manager of each cash and near-cash resources of the firm. The treasurer arranges credit reviews and sets policy for collecting receivables as d

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd