Inflation can distort ________.
A) book value of inventory costs
B) market value of revenue
C) market value of sales
D) book value of revenue

Question

Quizplus · Accepted Answer

Inflation can result in an increase in prices over time, which can distort the book value of inventory costs. This is because the cost of production and acquisition may have increased due to inflation, but the book value of inventory may not have been adjusted accordingly. As a result, the value of inventory on the balance sheet may not represent the actual cost of inventory in the current market.

Inflation Can Distort ________