Which principle requires maintaining the same accounting methods across periods to ensure comparability?

• A. Principle of Consistency
• B. Conservatism
• C. Materiality
• D. Matching Principle

Answer: (A)

Maintaining the same accounting methods from period to period to ensure comparability. The consistency principle asks you to keep using the same methods unless a good reason exists to change, so users can reliably compare financial statements over time and discern genuine trends. If a change is necessary, it should be disclosed and applied retroactively when feasible, with clear justification, so the impact on prior periods is visible.

Conservatism is about erring on the side of caution and not overstating assets or income. Materiality focuses on whether an item’s size or impact is significant enough to influence decisions. The matching principle links expenses to the revenues they help generate in the same period, rather than addressing whether methods are kept constant across periods.