Ten years after a company purchases a plot of land, it is measured on the balance sheet at its cost from the year it was purchased instead of its current selling price. This accounting practice is justified by the:
A) financial period assumption.
B) going concern assumption.
C) fiscal period assumption.
D) original cost base.

Question

Quizplus · Accepted Answer

The original cost base, also known as the historical cost principle, requires that assets be recorded at their original purchase price, not their current market value.

Ten Years After a Company Purchases a Plot of Land