The statement that is true with respect to current cost accounting is:
A)Gains are recorded only when the assets are disposed of
B)Holding gains are not included in current operating profits
C)Current operating profit is the excess of the current value of the output sold over the current cost of the related inputs
D)None of the above is true

Question

Quizplus · Accepted Answer

Current cost accounting records gains and losses as they occur, and the current operating profit is calculated as the excess of the current value of the output sold over the current cost of the related inputs. Therefore, Choice C is true. Choice A is incorrect because gains can also be recorded when the assets are revalued. Choice B is incorrect because holding gains are included in current operating profits under current cost accounting. Choice D is incorrect because Choice C is true.

The Statement That Is True with Respect to Current Cost