In the historical cost model there is an assumption that the monetary unit is fixed and constant over time.Which of the following components of the modern economy makes the assumption less valid than it was at the time the model was developed?

Question

Quizplus · Accepted Answer

The historical cost model assumes a stable monetary unit, but specific price-level changes, general inflation, and shifts in the physical operating capital maintenance perspective all challenge this assumption by introducing variability in value measurement over time.

In the Historical Cost Model There Is an Assumption That