Question

Deecee Co. adjusted its historical cost income statement by applying specific price indexes to its depreciation expense and cost of goods sold. Deecee's adjusted income statement is prepared according to

Answer 1

Answer: Current cost accounting

Explanation:

From the question, we are informed that Deecee Co. adjusted its historical cost income statement by applying specific price indexes to its depreciation expense and cost of goods sold.

This shows that Deecee's adjusted income statement is prepared according to current cost accounting. Under current cost accounting, it should be noted that it is possible to use specific price indexes to restate the financial statements items.