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    Question

    If a firm has been changing its depreciation policy

    every year, it is violating the_______ concept/principle of accounting.
    A Historical cost concept Correct Answer Incorrect Answer
    B Conservation concept Correct Answer Incorrect Answer
    C Consistency concept Correct Answer Incorrect Answer
    D Accounting period concept Correct Answer Incorrect Answer
    E Materiality concept Correct Answer Incorrect Answer

    Solution

    The sole purpose of the consistency principle, or consistency concept, is to ensure that transactions or events are recorded in the same way, from one accounting year to the next. When talking about different accounting methods, this can include anything from cash vs accrual accounting, and using LIFO vs FIFO methods.

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