Inflation Introduces Several Types of Distortions in Accounting Data, Some

Inflation introduces several types of distortions in accounting data, some of which have very real economic consequences for the firm. Which of the following statements regarding inflation is incorrect?

A) Nonmonetary assets that are carried at their historical cost, have substantially greater real economic value during periods of high inflation than implied by the current money unit, so if they are translated into the reporting currency using the current rate method, the dollar-equivalent amount does not reflect the real value of the underlying assets (they would be seriously undervalued) .
B) When calculating taxable income for a period in which inflation was high, one uses current period revenues but deducts historical costs that were recorded when the purchasing power of the currency was higher. Hence, costs are understated, taxable income is overstated, and taxes due are overstated.
C) In periods of high inflation, the first-in-first-out or FIFO method for inventory valuation should be used to calculate taxable income so that old inventory, whose true economic value is higher than implied at the current value of the money unit, will be eliminated quickly from the accounting records and the company will not have to take a large loss when their value is written down.
D) Accounting principles assume that the money unit in which the accounting records are maintained remains essentially stable over time, serves as a unit of exchange, and functions as a storehouse of value. These principles are violated during periods of high inflation, and that is why special accounting treatment is required during hyperinflation.
E) None of the statements above; all are correct.