Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:

Comparison of financial statements of one year with that of another year is possible only when concept........... is followed.

Options:

Going Concern

Materiality

Consistency

Accrual

Correct Answer:

Consistency

Explanation:

The concept of consistency is crucial for comparing financial statements from one year to another. It ensures that accounting methods and principles remain unchanged over time, providing a reliable basis for meaningful comparisons.