[ACECFAS] HYPERINFLATION (TOA)

Assets and Liabilities whose amounts are fixed by contract or otherwise in terms of pesos regardless of price level change

For purposes of adjusting financial statements for changes in the general price level, monetary items consist of

All of these indicate hyperinflation

Hyperinflation is indicated by characteristics of the economic environment of a country which include all of the following, except

General price index

In a hyperinflationary economy, amounts in the statement of financial position not expressed in the measuring unit current at the end of reporting period are restated by applying the

are not restated because they are already expressed in terms of the measuring unit current at the end of reporting period

In a hyperinflationary economy, monetary items

Measuring unit current at the end of reporting period

The financial statments of an entity that reports in the currency of a hyperinflationary economy shall be stated in terms of

Profit or loss and separately disclosed

The gain or loss on the net monetary position in a hyperinflationary economy shall be included in

Allowance for doubtful accounts

When computing information on a constant peso basis, which of the following in classified as monetary?

Inventory

When computing information on a constant peso basis, which of the following in classified as nonmonetary?

Accumulated depreciation - equipment

When computing information on a constant peso basis, which of the following is classified as nonmonetary?

Monetary asset and monetary liability

purchasing power gain or loss results from

excess of depreciation on average current cost over depreciation on historical cost

the realized holding gain for depreciable asset is equal to

excess of current cost at the date of sale over historical cost

the realized holding gain for nondepreciable asset is equal to

excess of net current cost of asset over the carrying amount

the unrealized holding gain for depreciable asset is equal to

excess of current cost at year-end over historical cost

the unrealized holding gain for nondepreciable asset is equal to

current cost less accumulated depreciation based on current cost

what is the net current cost of depreciable asset?

The general purchasing power of the peso at the latest end of the reporting period

A general price level statement of financial position is prepared and presented in terms of

Obligation under warranty

When computing information on a constant peso basis, which of the following in classified as nonmonetary?

holding gains are recognized

in current cost financial statements

Average current cost

what is the basis of deprecaition unde current cost accounting?

Administration costs paid in cash

All of the following are monetary items, except

Inflation rates have exceeded interest rates inthree successive years

All of the following would indicate that hyperinflation exists, except

Assets are measured at current cost

An accountant who recommends the adjustment of financial statements for price level changes should not support the recommendation by stating that

The body of the financial statements

An entity wishes to present information about the effect of changing prices in a hyperinflatinary economy should report this information in

A purchasing power loss if the item is a monetary liability

During a period of deflation in which a liability account balance remains constant, which of the following occurs?

Cash

During a period of defltion, an entity would have the greatest gain in general purchasing power by holding

Monetary liability

During a period of inflation, an account balance remains constant. With respect to this account, a purchasing power gain will be recognized if the account is a

Monetary asset

During a period of inflation, an account balance remains constant. With respect to this account, a purchasing power loss will be recognized if the account is a

A purchasing power gain if the item is a monetary liability

During the period of inflation in which a liability account balance remains constant, which of the following occurs?

Excess of cost of goods sold at average current cost over cost of goods sold at historical cost

The relaized holding gain for inventory sold is equal to

Cost adjusted for purchasing power change

The restatements of historical peso financial statements to reflect the general price level change results in presenting assets at

Excess in ending inventory at current cost over ending inventory at historical cost

The unrealized holding gain for ending invetory is euqal to

Price level adjusted financial statmetns measure current value

Which of the following arguments in favor of price level adjusted financial statements is not valid?

Historical cost restated for change in the general price level

Which of the following methods of reporting attempts to eliminate the effect of the changing value of the peso?

People prefer to keep their wealth in nonmonetary assets or a stable foreign currency

Which of the following would indicate that hyperinflation exists?

number of units sold times average current cost of units during the year

an entity prepared financial statemtns on a current cost basis. How should the entity compute cost of goods sold on a current cost basis?

Goods sold and invetory

current cost financial statements should report holding gains during the period for which of the following?