Question

Not adjusting the amounts reported in the financial statements for inflation is an example of which basic assumption or principle of accounting?a. Economic entity. b. Going concern. c. Historical cost. d. Full disclosure.

Answer 1

Answer:

c. Historical cost.

Explanation:

Based on the information provided within the question it can be said that this statement is an example of the basic principle of accounting known as historical cost. This term refers to using the value of something based on the original cost of when it was acquired and not adjusting the amounts for inflation or other newer variables.