When a firm calculates its profits after adjusting the effects of current level of inflation, this process is known as:
A. National income accounting
B. Inflation Accounting
C. Super Normal Profit
D. Normal Profit
Answer:B
When a firm calculates its profits after adjusting the effects of current level of inflation, this process is known as:
A. National income accounting B. Inflation Accounting C. Super Normal Profit D. Normal Profit
Explanation: The term Inflation Accounting is popular in the area of corporate profit accounting. Basically, due to inflation the profit of firms/companies gets overstated.