PRC-1 · Chapter 1 · Question 24 of 100
'Luminous Electronics' consistently uses the exact same inventory valuation method (such as FIFO) every single year. Which qualitative characteristic is primarily achieved by this practice?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Comparability
Explanation
The consistency concept ensures that identical accounting methods are applied across different periods, which directly enhances the comparability of the financial statements over time.
More Accounting Basics MCQs
- Q26'Sterling Services' completed a consulting project for a client in December but did not receive the cash payment until February of the…
- Q27What is the immediate effect on the accounting equation when a business uses its cash at the bank to fully settle an outstanding balance…
- Q28Which of the following internal stakeholders relies on financial statements primarily to assess whether the business can continue to…
- Q29A debit entry in the general ledger usually represents an increase in which of the following accounting elements?
- Q30According to IAS 1, which of the following documents is NOT considered a part of a complete set of financial statements?