175. Valuing assets at their fair value rather than at their cost is inconsistent with the: A) economic entity assumption. B) historical cost principle. C) periodicity assumption. D) full disclosure principles.

Question

Quizplus · Accepted Answer

The historical cost principle dictates that assets should be recorded at their original cost, not their current fair value. This is based on the idea that cost is a more reliable measure of an asset's value at the time of acquisition. Valuing assets at their fair value is inconsistent with this principle.