Respuesta :
Regarding the accounting principles, Statement 1 is incorrect; statement 2 is correct
The consistency principle refers to the requirement that a business should use the same accounting methods and policies from one period to the next. This principle allows for comparing financial statements over time and helps ensure that financial statements accurately reflect a firm's financial performance and position. However, consistency does not necessarily imply that a business will continue indefinitely. A business may choose to change its accounting methods or policies due to changes in laws or regulations, business operations, or adopting new accounting standards.
Whereas, a sole proprietorship is a type of business structure that is owned and operated by a single individual. As a sole proprietor, the owner has complete control over the business and is personally responsible for all of the business's debts and liabilities. It is relatively simple and inexpensive to set up and operate. If the business grows and the owner wishes to bring on additional shareholders, they may choose to reorganize the business as a different legal entity, likr a partnership or a corporation.
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