Consistency principle requires?

• A. Change methods frequently
• B. Use the same accounting methods and procedures from period to period
• C. Use different methods for different transactions
• D. Require external audits

Answer: (B)

Consistency means applying the same accounting methods and procedures from period to period so the financial statements stay comparable over time. This consistency lets people see genuine performance trends instead of being misled by changes in how numbers are calculated. Therefore, using the same methods and procedures from one period to the next is the right approach. If a change is necessary, it must be disclosed and, where feasible, retrospective adjustments are made to maintain comparability.

Choosing to change methods frequently would undermine comparability; using different methods for different transactions would produce inconsistent results; external audits relate to verification, not the requirement to keep methods constant.