The decrease in purchasing power of any monetary unit such as euro, dollars etc. is classified as ___________?
Correct answer: B. inflation
- A. net investment parity
- B. inflation
- C. purchasing parity
- D. buying parity
Explanation
Inflation is a general rise in prices that reduces the purchasing power of money. The other choices are not standard terms for this decline in monetary value.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
Practise Accounting Principles
351 free Accounting Principles MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Accounting questions like this
Accounting is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Accounting Principles questions
The rate of required return to cover the risk of investment, in absence of inflation is classified as ____________?
If the real rate is 16% and an inflation rate is 8%, then the nominal rate of return will be __________?
A concept which explains a received money in present time, is more valuable than money received in future is called __________?
An arrangement of line of authority within the company is classified as __________?
Depreciation fund method is also known as__________?
The process of paying off debt over time in regular installment of interest & principal sufficient to repay the loan in fully by its maturity date.