Which of the following statements does NOT apply to the historical cost principle?
A) Historical cost represents a value at a point in time.
B) The principle does not apply to financial instruments.
C) Historical cost results from a reciprocal or two-way exchange.
D) Over time, historical cost becomes irrelevant in terms of predictive value.

Question

Quizplus · Accepted Answer

The historical cost principle applies to financial instruments as well as other assets. This principle dictates that an asset is recorded on the balance sheet at its original purchase cost, which is applicable to a wide range of assets, including financial instruments.

Which of the Following Statements Does NOT Apply to the Historical