Chapter 2 Financial reporting and Changing Prices

Question 1

Financial statements prepared under which method include adjustments for both specific price changes and general price level changes?

Answer 1

Current cost/nominal dollar

Question 2

What is current cost accounting?

Answer 2

Under current cost accounting, specific prices indexes may be used to restate financial statement items.

Question 3

How are current cost amounts of inventory and property, plant and equipment measured?

Answer 3

At current cost or lower recoverable amount at the measurement date.