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Financial & Managerial Accounting
Found in: Page 259
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Does the accounting concept of consistency preclude any changes from one accounting method to another?

No, the accounting concept of consistency does not preclude changes from one accounting method to another.

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Step by Step Solution

Definition of Accounting Method

The method followed by the business entity for reporting all the financial transactions is known as the accounting method. Two general accounting methods are cash accounting and accrual accounting.

Explanation

The consistency principle does not make it impossible to change the accounting method. Rather, this principle states that a business entity must use a single method continuously for ensuring comparability in the financial statements of different periods.

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