This accounting method adjusts all items in a financial statement-assets,liabilities,costs,and revenues-to factor out the effects of inflation.

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Current cost accounting adjusts all items in a financial statement for inflation by valuing them at their current market prices instead of their historical cost. This ensures that the financial statements provide a more accurate representation of a company's financial performance and position in an inflationary environment. Operating profit method and historic cost principle do not adjust for inflation, while economic accounting is not a commonly used accounting method.

This Accounting Method Adjusts All Items in a Financial Statement-Assets,liabilities,costs,and