1. Which of the following terms or phrases is most closely associated with current value accounting?

1. Which of the following terms or phrases is most closely associated with current value

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1. Which of the following terms or phrases is most closely associated with current value accounting?
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accounting?

(a) Specific price changes.

(b) General price changes.

(c) Inflation.

(d) A change in the purchasing power of the currency.

2. Current purchasing power accounting is most closely associated with:

(a) Specific price changes.

(b) General price changes.

(c) Changes in replacement cost.

(d) Changes in net realizable value.

4. An asset purchased for i1,000 in 1980, when the consumer price index was 116

(1977 # 100) would be restated to what amount today in constant currency terms,

assuming today’s consumer price index is 200?

(a) i1,000.

(b) i1,160.

(c) i1,724.

(d) i2,000.

5. During a period of inflation, a company whose monetary liabilities exceed its

monetary assets has:

(a) A net loss in purchasing power.

(b) A net gain in purchasing power.

(c) Either a net gain or a net loss in purchasing power.

(d) Neither a net gain nor a net loss in purchasing power.