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
The book of Deven Verma could not be tallied. The account transferred the difference of Rs. 1.270 in the suspense account on the debit side. the following mistakes were found later

A light truck is purchased on January 1 at a cost of $27,000. It is expected to serve for eight years and have a salvage value of $3,000. Calculate the depreciation expense for t

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

effects of technology in banking sector

Financial statements Summaries of financial activities are known as financial statements that are prepared on a regular basis at the end of an accounting period. Accounting per

#quesDance fans switch away from dance music to R&B music AND the price of MP3 players decreases. tion..

exploration costs for mining companies are assets?.

Q. Example of accumulated depreciation account? The accumulated depreciation account doesn't represent cash that is being set aside to change the worn out asset. The un-depreci

hi I was wondering you use provide the solution of the back of the book for advance accounting theory by Craig Deegan 4 edition ISBN - 13: 978-007101314 - 7 ISBN - 10: 007101314

Q. Explain Financial accounting information? A Financial accounting information is precedent in nature that reporting on what has happened in the past. To facilitate comparison