Under current GAAP, most resources of a business entity are to be valued in its financial statements at
A)a value that is most relevant to the needs of users of the financial statements
B)historical cost
C)the current cost of replacing the resource
D)current appraisal values

Question

Quizplus · Accepted Answer

Under GAAP, most resources of a business entity are to be valued at historical cost. This means that the assets are recorded at their original cost when they were acquired, rather than their current market value or replacement cost. This method is preferred because it is reliable, verifiable, and objective. It also allows for consistency in financial reporting and makes it easier to compare financial statements from different periods.

Under Current GAAP, Most Resources of a Business Entity Are