Which method of accounting for inflation must be used under U.S.GAAP?
A)Current Replacement Cost method
B)General Purchasing Power method
C)Both Current Replacement Cost and General Purchasing Power methods must be used
D)Neither method must be used since inflation accounting is not required under U.S.GAAP.

Question

Quizplus · Accepted Answer

Inflation accounting is not required under U.S. GAAP, and therefore neither Current Replacement Cost nor General Purchasing Power method must be used. Instead, companies are required to use historical cost accounting, which represents transactions and events at the monetary value at the time they occurred.

Which Method of Accounting for Inflation Must Be Used Under