The tax code
A)adjusts values of inventories for inflation, but does not adjust the value of depreciation allowances.
B)adjusts the value of depreciation allowances for inflation, but does not adjust values of inventories.
C)adjusts both values of inventories and the value of depreciation allowances for inflation.
D)adjusts neither the values of inventories nor the value of depreciation allowances for inflation.

Question

Quizplus · Accepted Answer

The tax code typically does not adjust either the values of inventories or the value of depreciation allowances for inflation. This means that inflation can affect the real value of these items without any corresponding adjustment in their tax treatment.

The Tax Code