Accountıng I Deneme Sınavı Sorusu #1132456
Why do the companies have to use the same accounting system (periodic or perpetual inventory system) and the same inventory cost flow system (specific identification, weighted average cost, FIFO or LIFO) within the accounting periods?
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To unsold units left on hand as “Merchandise Inventory” in its financial statements. |
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To provide comparability of their financial statements. |
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To make knowledgeable decisions about the company. |
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To determine how frequently merchandise inventory is sold. |
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To measure inventory in a timely and accurate manner is critical for having uninterrupted business operations. |
Consistency Principle states that businesses should use the same accounting methods and procedures from period to period. From the inventories point of view, companies have to use the same accounting system (periodic or perpetual inventory system) and the same inventory cost flow system (specific identification, weighted average cost, FIFO or LIFO) within the accounting periods to provide comparability of their financial statements.
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