Financial Reporting and Changing Prices Flashcards
(16 cards)
The actual exchange value in the dollars at that time an asset was acquired or a liability was assumed
historic cost
The cost that would be incurred at the present time, the replacement cost.
current cost
Unadjusted for changes in purchasing power
nominal dollars
Dollars restated based on calculations of CPI ratios
constant dollars
The difference between historic cost and current cost is ___________
appreciation
The difference between nominal dollars and constant dollars is _________
inflation
based on historic prices without restatement for changes in purchasing power of the dollar
historic cost / nominal dollars
based on historic prices adjusted for changes in the general purchasing power of the dollar
historic cost / constant dollars
based on current cost without restatement for changes in the general purchasing power of the dollar
current cost / nominal dollars
based on current cost adjusted for changes in the general purchasing power of the dollar
current cost / constant dollars
The measurement method and current cost determination that is the basis for GAAP
historic cost / nominal dollars
Monetary items are _____
fixed
Holding monetary assets during periods of inflation will result in:
a loss of purchasing power
Holding monetary liabilities will result in:
a gain of purchasing power
Non-monetary items ______ ___ _______ with inflation and deflation
fluctuate in value
A contra account is classified as monetary or non-monetary based upon the classification of the ______ ______
related account
