Answer the following statements true (T) or false (F)

1) The consistency principle states that a business should use the same accounting methods and procedures from period to period.
2) A company reports in its financial statements that it uses the FIFO method of inventory costing. This is an example of the disclosure principle.
3) A company should not change the inventory costing method each period in order to maximize net income. This is an example of the disclosure principle.
4) A company changes its inventory costing method each period in order to maximize net income. This is a violation of the consistency principle.
5) A company is uncertain whether a complex transaction should be recorded as an asset or an expense. Under the conservatism principle, it should choose to treat it as an asset.


1. TRUE
2. TRUE
3. FALSE
4. TRUE
5. FALSE

Business

You might also like to view...

When refusing a request, a writer should:?

A) ?use the inductive approach. B) ?provide a vague reason to minimize disappointment. C) ?use the deductive outline. D) ?state the refusal before providing reasons.

Business

For most consumers, there is an assumed relationship between

A. price and quality. B. value and cost. C. internal and external reference prices. D. value and price consciousness. E. prestige prices and value.

Business

Only documentary evidence may be admitted at an administrative hearing

a. True b. False Indicate whether the statement is true or false

Business

Which of the following is not a trend in operations management?

A) Operations are being centralized. B) Operations are being offshored. C) Operations are now integrated into the application delivery process. D) All of the above

Business