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Comparability of financial statements relies primarily on:
ARandom choice of accounting policy each year
BDiffering presentation each year
CChanging policies to optimise tax
DConsistent application of selected accounting policies
Answer & Solution
Correct answer: D. Consistent application of selected accounting policies
1. Step 1: Per Ch 1, intra-enterprise comparability requires same policies year after year.
2. Step 2: Inter-enterprise comparability requires similar policies across entities or disclosure of differences.
3. Step 3: Hence (B).
_Source: ICAI BoS CA Inter Paper 1, Ch 3 "Applicability of Accounting Standards"_