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Inflation Accounting- Meaning, Top 2 Methods, Examples
It facilitates more accurate trend analysis over the years by removing distortions caused by inflation. Inflation accounting is a type of accounting that takes into account the effects of inflation on a company’s financial statements. It adjusts the company’s financial statements to reflect changes in the purchasing power of the currency, which is necessary because […]
Introduction to Accounting: Lesson 1 Learn for Free
Short-term (current) asset amounts are likely to be close to their income summary market values, since they tend to “turn over” in relatively short periods of time. In short, the cost principle generally prevents assets from being reported at more than cost, while conservatism might require assets to be reported at less than their cost. […]