The stable-monetary-unit assumption:
A)ensures that accounting records and statements are based on the most reliable data available.
B)requires all countries to record transactions in U.S.dollars.
C)maintains that each organization or section of an organization stands apart from other organizations and individuals.
D)enables accountants to ignore the effect of inflation on the accounting records.

Question

Quizplus · Accepted Answer

The stable-monetary-unit assumption enables accountants to ignore the effect of inflation on the accounting records. It assumes that the purchasing power of the currency used in the financial statements is stable over time. This allows for easy comparison of financial statements from different periods in terms of the nominal values of assets, liabilities, and equity without having to adjust for inflation.

The Stable-Monetary-Unit Assumption