60.1k views
3 votes
The accounting rule that states a business should use the same accounting methods and procedures from period to period is called

User Adinah
by
7.9k points

1 Answer

2 votes

Final answer:

The consistency principle in accounting refers to using the same accounting methods and procedures from period to period, ensuring comparability and reliability of financial statements.

Step-by-step explanation:

The accounting rule that states a business should use the same accounting methods and procedures from period to period is known as the consistency principle. This principle is essential for ensuring that a company's financial statements can be compared over multiple periods with reliability. The consistency principle means that once a company adopts an accounting method, it should continue to follow that method for all subsequent accounting periods unless there is a legitimate reason to change. This enhances the comparability of the financial statements which is crucial for investors, creditors, and other stakeholders who rely on them to make informed decisions.

User Tribus
by
7.0k points