Question

Changes in accounting policies can be made only _________.

• A. To comply with accounting standards
• B. To ensure better presentation of the financial statement
• C. To comply with law
• D. All of the above

Answer 1

The correct option is D All of the above

Consistency is the basic assumption and it is assumed that various policies or methods adopted by the firm while preparing the financial statement are consistent from one period to another.

However, changes in the policies can be made if this is required to comply with law, to comply with the accounting standards or to ensure better presentation. In case of changes, a disclosure has to be given with the financial statement.