Which of the Following Is the Advantage of Using Current

question 4

Multiple Choice

Which of the following is the advantage of using current purchasing power adjustment?

• A) It relies on data already available under historical cost accounting.
• B) There is no need to incur cost or effort to collect data about current asset values.
• C) CPI data also readily available.
• D) All of the given options are correct.

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Definitions:

Avoidable Cost

Expenses that can be eliminated if a particular decision is made or if a business operation is discontinued.

Sunk Cost

Costs that have already been incurred and cannot be recovered or altered by any future action.

Eliminated

Removed or taken away, often used in the context of erasing a component or aspect in various fields such as finance, science, or competition.

Book Value

The net value of a company's assets as recorded on the balance sheet, minus its liabilities and the par value of any outstanding shares.