Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 2 - A Further Look at Financial Statements - Questions: 15

Answer

Comparability is in relation to a point in time while consistency is a property that is important year to year.

Work Step by Step

Information can be evaluated between two companies if it is comparable, meaning it was derived using similar principles. Information for the same company can be evaluated over time only if the method used to derive the information is consistent over time.
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