Since the purchasing power of money is changing, the value of assets and liabilities shown in financial statement does not reflect ________ market situation.

past

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future

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current

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both a and c

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Solution

The correct option is B current
As Financial statements are prepared on the basis of historical cost.
It creates a demerit of financial statements. Since the purchasing power of money is changing, the values of assets and liabilities shown in financial statement do not reflect current market situation.

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