Why do accounting standards require consistency and comparability? A)

QUESTION

Why do accounting standards require consistency and comparability?

A) so that companies can be as profitable as possible
B) so that companies’ financial states can be measured meaningfully
C) so that companies’ financial results are as reliable as possible
D) so that foreign businesses can make sense of American business practices
E) so that anyone who is not a certified accountant can read financial statements

ANSWER

Answer: B
Explanation: B) When financial statements are consistent and comparable, users can compare them with earlier statements from the same company and with statements from other companies.