Principle of Consistency in Accounting

Steps:

• Identify the principle: Consistency requires using the same accounting methods over periods for comparability.
• Review choices: Evaluate which option applies uniform accounting treatment to the delivery van.
• Eliminate non-accounting options: A and B relate to operations, not accounting methods.
• Select depreciation method: D matches consistent application of accounting policy.

Why D is correct:

• The consistency principle mandates using the same depreciation method (e.g., straight-line) across periods to ensure reliable financial comparisons, as per GAAP standards.

Why the others are wrong:

• A: Focuses on operational volume, not accounting treatment.
• B: Involves cash outflows, unrelated to accounting consistency.
• C: Specifies equal amounts, but consistency requires the same method, not equal results.

Final answer: D