Which one of the following statements is true concerning assets?
A)They are recorded at market value and then adjusted for inflation.
B)They are recorded at market value for financial reporting purposes as historical cost may be arbitrary.
C)Assets are used using the time-period approach.
D)Accountants use the term historical cost to refer to the original cost of an asset.

Question

Quizplus · Accepted Answer

Accountants use the term historical cost to refer to the original cost of an asset. This means that assets are recorded at their original cost and not at market value. This is a conservative approach that helps to avoid overvaluing assets and inflating financial statements.

Which One of the Following Statements Is True Concerning Assets