The cost principle requires that an asset be recorded at the cash or cash equivalent amount that was given in exchange for it.

Question

Quizplus · Accepted Answer

This is correct. The cost principle is a fundamental accounting concept that requires an asset to be recorded at its original cost, which is usually the amount of cash or cash equivalent paid for it. This ensures that financial statements accurately represent the value of a company's assets and are reliable for decision making.

The Cost Principle Requires That an Asset Be Recorded at the Cash