One of the limitations of the balance sheet is that the dollar amounts for different assets reflect different levels of inflation.That is the result of the ________ assumption.
A) recognition
B) matching
C) stable monetary unit
D) conservatism

Question

Quizplus · Accepted Answer

The stable monetary unit assumption assumes that the dollar remains constant over time, which is not the case due to inflationary pressures. Therefore, the dollar amounts reported for different assets may reflect different levels of inflation, making it difficult to compare them accurately.

One of the Limitations of the Balance Sheet Is That