The measurement method most commonly used in the preparation of financial statements is:
A) present value;
B) current cost;
C) realisable value;
D) historical cost.

Question

Quizplus · Accepted Answer

Historical cost is the most commonly used measurement method in the preparation of financial statements. This method measures assets and liabilities based on their original cost when acquired, rather than their current market values or future cash flows. It is widely used because it provides a reliable and objective basis for reporting financial information and is consistent with the underlying concept of conservatism. However, it may not always reflect the economic reality of a company's current situation, particularly in a rapidly changing market environment.

The Measurement Method Most Commonly Used in the Preparation of Financial