Valuing assets at their liquidation values rather than their cost is inconsistent with the
A) time period assumption.
B) matching principle.
C) materiality constraint.
D) historical cost principle.

Question

Quizplus · Accepted Answer

Valuing assets at their liquidation values rather than their cost is inconsistent with the historical cost principle, which states that assets should be recorded at their original cost. The liquidation value is the estimated proceeds that would be obtained from selling the assets in an orderly disposal. This value may be lower or higher than the original cost of the asset, but it is not relevant for financial reporting purposes under the historical cost principle.

Valuing Assets at Their Liquidation Values Rather Than Their Cost