Question

If a company follows the written down value method of depreciating machinery year after year, it is due to __________.

• A. comparability
• B. convenience
• C. consistency
• D. all of the above

Answer 1

Answer: (C)

consistency

Option C is correct. In accounting, Consistency principle requires that a company's financial statements should follow same accounting principles, methods, procedures and practices from one accounting period to another. This allows the readers of the financial statements to make meaningful comparison. So, if a company follows same method of depreciation year after year, it is due to consistency principle.