Question

Also known as the historical cost principle, ________ states that everything the company owns or controls (assets) must be recorded at their value at the date of acquisition. A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle

Name: Problem 11, Chapter 3: Principles of Accounting Volume 1: Financial Accounting
Uploaded: 2020-04-16T07:45:44-08:00
Duration: 9 min 27 s
Channel: Puneet Prajapati
Description: Also known as the historical cost principle, states that everything the company owns or controls (assets) must be recorded at their value at the date of acquisition. A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle

   Also known as the historical cost principle, ________ states that everything the company owns or
controls (assets) must be recorded at their value at the date of acquisition.
A. revenue recognition principle
B. expense recognition (matching) principle
C. cost principle
D. full disclosure principle

Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin,… 1st Edition

Chapter 3, Problem 11

Instant Answer

Solved by Expert Puneet Prajapati

04/16/2020

Step 1

This principle states that a company should record its assets at their original or acquisition cost. This cost includes the purchase price and any other charges necessary to prepare the asset for use. Show more…

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Also known as the historical cost principle, ________ states that everything the company owns or controls (assets) must be recorded at their value at the date of acquisition. A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle

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Key Concepts

Historical Cost Principle

This concept states that assets should be recorded at their original cost at the time of acquisition, rather than their current market value. It ensures that financial records are based on objective and verifiable information, which aids in consistency and reliability in financial reporting.

Cost Principle

Also known as the historical cost principle, the cost principle mandates that all assets are recorded at their purchase price. This principle is fundamental in accounting as it helps prevent subjective adjustments and provides a clear, consistent basis for asset valuation.

Asset Valuation

Asset valuation under this principle involves determining and recording the value of the company's assets based on their acquisition cost. This approach minimizes estimation errors and enhances the comparability of financial statements over time.

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