The use of the historical cost principle is justified because the resulting information has the primary quality ingredients of
A)neutrality and predictive value
B)representational faithfulness and neutrality
C)timeliness and neutrality
D)verifiability and feedback value

Question

Quizplus · Accepted Answer

The historical cost principle results in financial information that is both representational faithful (as it accurately reflects the original cost of the asset) and neutral (as it is not influenced by the subjective opinions of management or market fluctuations).

The Use of the Historical Cost Principle Is Justified Because