BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The historical cost principle is a basic accounting principle under U.S. GAAP. Under the historical cost principle, most assets are to be recorded on the balance sheet at their historical cost even if they have significantly increased in value over time. Not all assets are held at historical cost.

Detailed explanation-2: -The Historical Cost Principle requires the carrying value of assets on the balance sheet to be equal to the value on the date of acquisition – i.e. the original price paid.

Detailed explanation-3: -The historical cost principle, aka the cost principle, requires that an asset be reported at its cash or cash equivalent cost at the time of purchase, including any additional expenses incurred to get the asset in place and prepared for use.

Detailed explanation-4: -The cost principle requires one to initially record an asset, liability, or equity investment at its original acquisition cost.

Detailed explanation-5: -The cost principle, also known as the historical cost principle states that assets should be recorded at their original cost, rather than their current market value. This is because, in many cases, the cost of an item is subjective and dependent on market conditions.