6.Which of the following observation regarding the amounts reported in financial statements that have been adjusted for general price level changes is valid?

a.The amount obtained by adjusting an asset's cost for general price level change usually approximates the current fair value.

b.The amount adjusted foe general price level change is not departure from historical cost,

c.When an inventory increases and prices are rising, FIFO inventory accounting has the same effect on financial statements as amounts adjusted for general price level changes.

d.When inventory remains constant and prices are rising, average cost inventory accounting has the same effect on financial statements as amount adjusted for the general price level changes.

7.Which of the following arguments in favor of price level adjusted financial statements is not valid?

a.Price level adjusted financial statements use historical cost

b.Price level adjusted financial statements compare uniform purchasing power among various periods

c.Price level adjusted financial statements measure current value.

d.Price level adjusted financial statements measure earnings in terms of a common peso

8.Which of the following methods of reporting attempts to eliminate the effect of changing value of the peso?

a.Discounted net present value of future cash flows

b.Historical cost restated for change in the general price level

c.Replacement cost

d.Exit value

9.The restatement of historical peso financial statements to reflect the general price level change results in presenting assets at

a.Lower of cost and net realizable value

b.Fair value

c.Cost adjusted for purchasing power change

d.Current replacement cost

10.When computing information on a constant peso basis which of the following is classified as nonmonetary?

a.Allowance for doubtful accounts

b.Accumulated depreciation - equipment

c.Unamortized premium on bonds payable

d.Advances to unconsolidated subsidiaries

11.When computing information on a constant peso basis, which of the following is classified as nonmonetary?

a.Obligation under warranty

b.Accrued expenses

c.Unamortized discount on bonds payable

d.Refundable deposit