11..Explain why financial repor ts prepared under the historical cost convention are subject to the following major...
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11..Explain why financial repor ts prepared under the historical cost convention are subject to the following major limitations:
● inventor y is under valued
● the depreciation charge to the income statement is understated
● gains and losses on net monetar y assets are undisclosed
● balance sheet values are understated
● periodic comparisons are invalidated.
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Related Book For
Financial Accounting And Reporting
ISBN: 9780273712312
12th Edition
Authors: Barry Elliott, Jamie Elliott
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