Proponents of historical cost ordinarily maintain that in comparison with all other valuation alternatives for general purpose financial reporting, statements prepared using historical costs are more
A)reliable.
B)relevant.
C)indicative of the entity's purchasing power.
D)conservative.

Question

Quizplus · Accepted Answer

Proponents of historical cost argue that it provides a reliable measure of an entity's financial position and performance, as it is based on actual transactions that have occurred. Other valuation alternatives, such as fair value, may be subjective and based on estimates or assumptions. Therefore, historical cost is considered more reliable.

Proponents of Historical Cost Ordinarily Maintain That in Comparison with All