Not Adjusting the Amounts Reported in the Financial Statements for Inflation

question 51

Multiple Choice

Not adjusting the amounts reported in the financial statements for inflation is an example of which basic principle of accounting?

• A) Economic entity.
• B) Going concern.
• C) Historical cost.
• D) Full disclosure.

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Definitions:

Statutory Law

The assortment of rules and regulations put forth by legislatures.

Governing Authority

The organization, body, or individual that has the power to make and enforce rules, laws, and regulations within a specified jurisdiction.

Organized Society

A structured group of individuals governed by established laws, norms, and institutions.

Business Law

The branch of law that deals with the rights, relations, and conduct of persons and businesses engaged in commerce, merchandising, trade, and sales.