A business purchased a desk for $250. Another store had the same desk priced at $300. The historical cost concept would dictate that the business record $250 as the cost of the desk.

Question

Quizplus · Accepted Answer

The historical cost concept requires that assets be recorded at the cash or cash equivalent amount at the time of the transaction, which in this case is $250, the amount actually paid for the desk.

A Business Purchased a Desk for $250