Accounting for Price Level Changes - Management Duniya

Accounting for Price Level Changes

Accounting for Price Level Changes:

Financial Statements are prepared with a view of presenting the financial position of the business on a particular date & display the results achieved during an accounting period. These accounts (statements) according to historical cost (i.e. original or acquisition cost) on the assumption the purchasing power of the money remains the same. But assumption is not valid as purchasing power of the rupee the basic measuring unit of accounting in India, goes on changing from time to time on account of changes upwards or downwards in price levels.

Tags: Account, accountant, accounting, Capital, changes, Credit, creditor, debit, debtor, expenses, finance, income, level, Management, Price, price level, revenue
By: Management Duniya