Replacement Cost Accounting (Current Cost Method) During a Period of Inflation

Multiple Choice

Replacement cost accounting (current cost method) during a period of inflation will usually

A) increase assets, decrease net income before taxes, and lower the return on equity.
B) increase assets, increase net income before taxes, and increase the return on equity.
C) decrease assets, increase net income before taxes, and increase the return on equity.
D) None of the options apply.