GCEFinancial AccountingAccounting Concepts and Conventions2023

A trader who has been using the FIFO method of stock valuation suddenly switches to the AVCO method without disclosure. This action violates the

Aaccrual concept
Bconsistency conceptCORRECT
Cmateriality concept
Dmoney measurement concept
AI
Toaster Teacher
Why the answer is B, and why the others tempt you.
The consistency concept requires that once an accounting method is adopted, it should be applied uniformly from one period to another to allow meaningful comparison of financial statements. Switching from FIFO to AVCO without disclosure violates this principle. Any change in method must be disclosed and the effect stated.
Want this in Pidgin, Yoruba, Igbo or Hausa? Sign up free →

Practice more Financial Accounting questions

GCE Financial Accounting has thousands more questions like this — with Worked answers on every one.