Which of These Is the Strongest Argument in Favour of Current

question 28

Multiple Choice

Which of these is the strongest argument in favour of current replacement cost as an alternative to historical cost?

• A) Current replacement cost provides a more reliable measure of performance
• B) Current replacement cost provides a more relevant measure of performance
• C) Current replacement cost provides a more reliable balance sheet
• D) Current replacement cost provides better information on cash flows

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Definitions:

Continuity/Discontinuity

A fundamental issue concerning the process of development that addresses the extent to which development tends to be continuous, consisting of the gradual accumulation of small changes, and the extent to which it is discontinuous, involving a series of abrupt, radical transformations.

Development

The process of growth or progress, often marked by a series of changes or stages, in the context of individuals, societies, or organisms.

Gradual

describes a process happening in small degrees, steps, or stages over a period, rather than suddenly.

Continuous Process

An operation or production system where input materials are continuously fed and processed, resulting in a continuous output.