(a) What do you consider to be the main weaknesses of historical cost accounting when prices are rising?

(10 marks)

(b) State two ways in which firms have adopted different accounting policies for specific items in historical cost accounts so that they partly reflect rising price levels. (4 marks)

(c) The stewardship approach of traditional accounting has been said to have been replaced by a user-orientated approach. Briefly discuss this assertion in relation to historical cost accounts.