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
Q. Explain about Accrued assets? Accrued assets are assets such like interest receivable or accounts receivable that haven't been recorded by the end of an accounting period. T

Earned service revenue and received cash As its first transaction in July Metro performed deliverance services for customers and received USD 4800 cash. This transaction improv

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


Your individual coursework portfolio addresses the following learning outcomes: ? Discuss the corporate governance issues and the duty of care of the directors of limited companies

Q. Concepts of accounting? - The major underlying assumptions or else concepts of accounting are (a) business entity (b) going concern (continuity) (c) money measurement (d) st

Q. Explain about financial statement? The income statement is the statement of retained earnings the balance sheet and the statement of cash flows of Metro Courier Inc demonstr

Profitability refers to a company's ability to obtain  profits and positive cash flows and to its ability to obtain an adequate return on invested capital or a company's ability to

a decrease in owner''s equity may result from a(n) a. purchase of office supplies for cash b. withdrawal of cash from the business by owner c. revenue that is derived from sales of

Has accounting become too interesting? In recent years, accounting has become front-page news and has been a key talking point among those connected with world of business. Reg