Question

"Accountant should follow the same principles of accounting continuously", is as per which accounting convention ____________________.

• A. Convention of conservatism
• B. Convention of full disclosure
• C. Convention of consistency
• D. None of these

Answer 1

Answer: (C)

Convention of consistency

Consistency is a basic assumption of accounting and it is assumes that, the various policies and methods adopted by the concern while preparing the accounts, are to be consistent from one period to another.

The accounting information provided by the financial statements would be useful in drawing conclusions regarding the working of an enterprise only when it allows comparisons over a period of time as well as with the working of other enterprises.

This can be possible only when accounting policies and practices followed by enterprises are uniform and are consistent over the period of time.