BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Cost principle
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Revenue principle
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Expense principle
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Matching principle
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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 states that a company or business must account for and record all assets at the original cost or purchase price on their balance sheet.
Detailed explanation-3: -2.5 ACCOUNTING COST CONCEPT Accounting cost concept states that all assets are recorded in the books of accounts at their purchase price, which includes cost of acquisition, transportation and installation and not at its market price.
Detailed explanation-4: -The concept according to which assets are recorded in the books of accounts at the price at which they are acquired or purchased is called cost concept.
Detailed explanation-5: -What is the Cost Principle? The cost principle means items need to be recorded as the actual price paid. It is the same way when a buyer buys products, and the recording is done based on the price paid. In short, the cost principle is equal to the amount paid for each transaction.