What Is Not a Valid Criticism of Historical Cost Accounting

question 16

Multiple Choice

What is not a valid criticism of historical cost accounting?

• A) It is not relevant in times of changing prices
• B) It is not logical to add assets together that have been purchased in different periods, with dollars of different purchasing power
• C) It understates profit in times of rising prices
• D) It distorts current year's operating results by including the current year's income, holding gains that accrued in previous periods

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Definitions:

Trophic Level

Position of an organism in a food chain.

Chaparral Biome

A biome characterized by dense, spiny shrubs and a Mediterranean climate, with hot, dry summers and mild, wet winters, typically found in California and the Mediterranean region.

Primary Production

The rate at which an ecosystem’s producers capture and store energy.