CA Intermediate Exam > CA Intermediate Questions > Consistency with reference to application of ...
Start Learning for Free
Consistency with reference to application of accounting principles refer to the [2010 –December]
- a)All the companies in the same industries should use identical procedures and methods
- b)Income and assets have not been oveRs.tated
- c)Accounting methods and procedures used have to be consistency applied from to year.
- d)Any accounting method or procedure can be utilized
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Consistency with reference to application of accounting principles ref...
Understanding Consistency in Accounting Principles
Consistency in accounting refers to the principle that a company should apply the same accounting methods and procedures from one financial period to the next. This is crucial for several reasons:
Importance of Consistency
- Comparability: By maintaining the same accounting practices, stakeholders can easily compare financial statements over different periods. This comparability aids investors, analysts, and management in making informed decisions.
- Reliability: Consistent application of accounting principles enhances the reliability of financial statements. Users of these statements can trust that any changes in figures are due to actual operational changes and not fluctuations in accounting methods.
Clarifying Option C
- Methodological Stability: Option C states that "Accounting methods and procedures used have to be consistently applied from year to year." This emphasizes that a company should not frequently change its accounting policies. If changes are necessary, they should be disclosed and justified.
- Financial Integrity: Consistency helps in maintaining the integrity of financial reporting. It prevents manipulation of financial results through arbitrary changes in accounting practices.
Why Other Options Are Incorrect
- Option A: While similar industries may adopt similar methods, it is not a requirement that all companies use identical procedures. Different entities may have valid reasons for their accounting choices.
- Option B: This option discusses the accuracy of income and assets but does not address the principle of consistency.
- Option D: This suggests that any method can be used, which contradicts the idea of consistency. Accounting methods must be applied consistently unless a justified change is made.
In conclusion, option C correctly captures the essence of the consistency principle in accounting, ensuring that financial statements are comparable and reliable over time.
Consistency in accounting refers to the principle that a company should apply the same accounting methods and procedures from one financial period to the next. This is crucial for several reasons:
Importance of Consistency
- Comparability: By maintaining the same accounting practices, stakeholders can easily compare financial statements over different periods. This comparability aids investors, analysts, and management in making informed decisions.
- Reliability: Consistent application of accounting principles enhances the reliability of financial statements. Users of these statements can trust that any changes in figures are due to actual operational changes and not fluctuations in accounting methods.
Clarifying Option C
- Methodological Stability: Option C states that "Accounting methods and procedures used have to be consistently applied from year to year." This emphasizes that a company should not frequently change its accounting policies. If changes are necessary, they should be disclosed and justified.
- Financial Integrity: Consistency helps in maintaining the integrity of financial reporting. It prevents manipulation of financial results through arbitrary changes in accounting practices.
Why Other Options Are Incorrect
- Option A: While similar industries may adopt similar methods, it is not a requirement that all companies use identical procedures. Different entities may have valid reasons for their accounting choices.
- Option B: This option discusses the accuracy of income and assets but does not address the principle of consistency.
- Option D: This suggests that any method can be used, which contradicts the idea of consistency. Accounting methods must be applied consistently unless a justified change is made.
In conclusion, option C correctly captures the essence of the consistency principle in accounting, ensuring that financial statements are comparable and reliable over time.
|
Explore Courses for CA Intermediate exam
|
|
Top Courses for CA IntermediateView all
Question Description
Consistency with reference to application of accounting principles refer to the [2010 –December]a)All the companies in the same industries should use identical procedures and methodsb)Income and assets have not been oveRs.tatedc)Accounting methods and procedures used have to be consistency applied from to year.d)Any accounting method or procedure can be utilizedCorrect answer is option 'C'. Can you explain this answer? for CA Intermediate 2025 is part of CA Intermediate preparation. The Question and answers have been prepared according to the CA Intermediate exam syllabus. Information about Consistency with reference to application of accounting principles refer to the [2010 –December]a)All the companies in the same industries should use identical procedures and methodsb)Income and assets have not been oveRs.tatedc)Accounting methods and procedures used have to be consistency applied from to year.d)Any accounting method or procedure can be utilizedCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Intermediate 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consistency with reference to application of accounting principles refer to the [2010 –December]a)All the companies in the same industries should use identical procedures and methodsb)Income and assets have not been oveRs.tatedc)Accounting methods and procedures used have to be consistency applied from to year.d)Any accounting method or procedure can be utilizedCorrect answer is option 'C'. Can you explain this answer?.
Consistency with reference to application of accounting principles refer to the [2010 –December]a)All the companies in the same industries should use identical procedures and methodsb)Income and assets have not been oveRs.tatedc)Accounting methods and procedures used have to be consistency applied from to year.d)Any accounting method or procedure can be utilizedCorrect answer is option 'C'. Can you explain this answer? for CA Intermediate 2025 is part of CA Intermediate preparation. The Question and answers have been prepared according to the CA Intermediate exam syllabus. Information about Consistency with reference to application of accounting principles refer to the [2010 –December]a)All the companies in the same industries should use identical procedures and methodsb)Income and assets have not been oveRs.tatedc)Accounting methods and procedures used have to be consistency applied from to year.d)Any accounting method or procedure can be utilizedCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Intermediate 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consistency with reference to application of accounting principles refer to the [2010 –December]a)All the companies in the same industries should use identical procedures and methodsb)Income and assets have not been oveRs.tatedc)Accounting methods and procedures used have to be consistency applied from to year.d)Any accounting method or procedure can be utilizedCorrect answer is option 'C'. Can you explain this answer?.
Solutions for Consistency with reference to application of accounting principles refer to the [2010 –December]a)All the companies in the same industries should use identical procedures and methodsb)Income and assets have not been oveRs.tatedc)Accounting methods and procedures used have to be consistency applied from to year.d)Any accounting method or procedure can be utilizedCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Intermediate.
Download more important topics, notes, lectures and mock test series for CA Intermediate Exam by signing up for free.
Here you can find the meaning of Consistency with reference to application of accounting principles refer to the [2010 –December]a)All the companies in the same industries should use identical procedures and methodsb)Income and assets have not been oveRs.tatedc)Accounting methods and procedures used have to be consistency applied from to year.d)Any accounting method or procedure can be utilizedCorrect answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Consistency with reference to application of accounting principles refer to the [2010 –December]a)All the companies in the same industries should use identical procedures and methodsb)Income and assets have not been oveRs.tatedc)Accounting methods and procedures used have to be consistency applied from to year.d)Any accounting method or procedure can be utilizedCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for Consistency with reference to application of accounting principles refer to the [2010 –December]a)All the companies in the same industries should use identical procedures and methodsb)Income and assets have not been oveRs.tatedc)Accounting methods and procedures used have to be consistency applied from to year.d)Any accounting method or procedure can be utilizedCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of Consistency with reference to application of accounting principles refer to the [2010 –December]a)All the companies in the same industries should use identical procedures and methodsb)Income and assets have not been oveRs.tatedc)Accounting methods and procedures used have to be consistency applied from to year.d)Any accounting method or procedure can be utilizedCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Consistency with reference to application of accounting principles refer to the [2010 –December]a)All the companies in the same industries should use identical procedures and methodsb)Income and assets have not been oveRs.tatedc)Accounting methods and procedures used have to be consistency applied from to year.d)Any accounting method or procedure can be utilizedCorrect answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Intermediate tests.
|
|
Explore Courses for CA Intermediate exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up
within 7 days!
within 7 days!
Takes less than 10 seconds to signup