Consistency principle, Accounting Basics

A company has been depreciating its IT equipment over 5 (five )years, but now finds that it is becoming obsolete in 3 years.  

What does the consistency principle allow the company to do?

A. change depreciation policy to 3 years and highlight the effect of this in its financial statements

B. change depreciation policy to 3 years without indicating the effect on profits

C. continue to depreciate over 5 years according to the existing policy

D. continue to depreciate over 5 years but note that after 3 years the equipment will be obsolete

 

Posted Date: 2/13/2013 12:11:55 AM | Location : United States







Related Discussions:- Consistency principle, Assignment Help, Ask Question on Consistency principle, Get Answer, Expert's Help, Consistency principle Discussions

Write discussion on Consistency principle
Your posts are moderated
Related Questions
INCOME SUMMARY ACCOUNT This is a temporary account which used to summarize the balances of temporary revenue and expense accounts. This is also known as a clearing account. The

the consequences of non-compliance of each of the accounting concepts.

Solve accounting income statement question in single step with given details.. The following are information for the Lotu Wo Company:                 Net Sales             5

Q. Explain Weighted-average inventory? Weighted-average: Ensuing inventory is priced using a weighted-average unit cost. In perpetual inventory procedure a new weighted-average

Uses of the Profit and Loss Account 1) The key utilize is to monitor and calculate profit. This suppose that the informat ion recording is correct. Significant harms can arise

For my accounting class, how would I journalize the adjusting entry for Annual depreciation is $3,480 on the building with the building amounting to $76,000 on the trial balance fo

Pro forma Financial Statements In accounting, a financial statement in which the amounts begin are fully or partially estimates; from the Latin for "as a matter of form."

Perth Ltd acquired 80% of the share capital of Summer Ltd on 1 July 2011. The following equity balances appeared in the records of Summer Ltd at the date of acquisition: Share capi

Q. FIFO under perpetual inventory procedure? FIFO under perpetual inventory procedure in perpetual inventory procedure the ending balance in the Merchandise Inventory account r

Implication of applying accounting concept wrongly