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

Which of the following items will be entered in the cash payments journal of an entity when app applicable subsidiary journals are in use? Merchandise purchased on credit Merchand

how can i determine the total debt of a commercial bank? Which financial statement do i need to look?

Q. Describe about chain discount? Occasionally the list price of a product is subject to several trade discounts this series of discounts is a chain discount. Chain discounts s

Q. Explain about realization principle? Realization of revenue Under the realization principle the accountant doesn't recognize (record) revenue until the seller obtains the ri

AL MASA a sole trader,decided to install a new machine to use within her sole trader business

I chose table 2-4 Loan Amortization Schedule, $100,000 at 6% for 5 years to discuss. Table 2-4 relates to the other two tables in that it is the opposite of the other two tables. T

A user buys a new transponder for $20. What debit and credit entries would need to be made?

Assignment on Generally Accepted Accounting Principles

Describe in brief about the Wholesalers They buy goods in bulk from manufacturers and sell them to retailers, other schools, wholesalers and other non-profit institutions, and