PRC-1 · Chapter 1 · Question 33 of 100
Which of the following best describes the 'Historical Cost' concept?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Assets are recorded at the actual cash equivalent amount paid to acquire them.
Explanation
The historical cost concept requires that an asset is initially recorded in the accounting records at the original, objective cost incurred to acquire it, regardless of future market value changes.
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