The measurement principle,also called the cost principle:
A)Prescribes that accounting information is based on actual cost.
B)Provides guidance on when a company must recognize revenue.
C)Prescribes that a company report the details behind financial statements that would impact users' decisions.
D)Prescribes that a company record the expenses it incurred to generate the revenue reported.
E)Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

Question

Quizplus · Accepted Answer

The measurement principle, also known as the cost principle, requires that accounting information is based on actual cost. This means that assets are recorded at their historical cost, and expenses are recorded when incurred. It ensures that financial statements are reliable and objective by avoiding subjective valuations.

The Measurement Principle,also Called the Cost Principle