Why Has Inflation Accounting NOT Been Required in the United

question 50

Multiple Choice

Why has inflation accounting NOT been required in the United States and the United Kingdom since the 1980s?

• A)Accounting regulators in the U.S.and U.K.have not addressed the issue of inflation accounting in their pronouncements.
• B)Inflation has not been a significant problem in the U.S.and the U.K.since the 1980's.
• C)Accounting regulators could not agree on a method for adjusting financial statements for the effect of inflation.
• D)Corporations in the U.S and U.K.voluntarily report inflation-adjusted financial statements,making the regulations unnecessary.

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Definitions:

Repression

A defense mechanism where unpleasant thoughts, memories, or feelings are unconsciously excluded from awareness.

Defense Mechanism

A psychological strategy unconsciously used to protect a person from anxiety arising from unacceptable thoughts or feelings.

Denial

A defense mechanism in which confrontation with a reality is avoided by denying the existence of the problem or reality.

Projection

A defense mechanism in psychology where an individual attributes their own unacceptable thoughts, feelings, or motives to another person.