Prior to 2007, which method of accounting for inflation most closely represented the supplemental reporting required in Mexico?
A)Current replacement cost
B)Current cost
C)General purchasing power
D)Historical cost

Question

Quizplus · Accepted Answer

The most closely represented method of accounting for inflation required in Mexico prior to 2007 was the general purchasing power method. This method adjusts the financial statements to reflect changes in purchasing power caused by inflation, therefore providing a more accurate representation of the real economic performance of a company.

Prior to 2007, Which Method of Accounting for Inflation Most