According to the Philips Approach to Accounting for Inflation

question 24

Multiple Choice

According to the Philips approach to accounting for inflation,

• A) a gearing adjustment was used to reflect the extent to which the company benefits from financing the purchase of capital assets by long term debt rather than by equity.
• B) net realizable value was used to value assets, but replacement values were not used.
• C) target costs were used for inventory rather than standard costs.
• D) physical assets were adjusted to current values, but there was no gain or loss from holding net financial assets.

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