Which principle allows comparisons of accounting reports over time?

The principle that allows for comparisons of accounting reports over time is comparability. This principle ensures that financial statements can be compared with those of previous periods or other entities. When the same accounting methods are applied consistently across periods, users can analyze trends and make informed decisions based on the financial data. Comparability is essential for investors, stakeholders, and analysts who rely on financial reports to evaluate performance and make predictions about future outcomes.

While reliability emphasizes the accuracy and dependability of financial information, it does not specifically pertain to the ability to compare information over time. Similarly, the principle of consistency relates to using the same accounting policies from one period to another, which supports comparability but does not define it. The monetary unit principle states that financial transactions are recorded in a stable currency, which is necessary for reporting but does not directly impact the ability to perform time-based comparisons. Comparability encompasses all these elements, allowing users to draw meaningful insights from accounting reports over time.