Recording of Fixed Assets at cost ensures adherence of
A)Conservatism Concept
B)Going Concern Concept
C)Cost Concept
D)Both (a) and (b) above

Question

Quizplus · Accepted Answer

Recording fixed assets at cost ensures adherence to both the conservatism concept and the going concern concept. The conservatism concept dictates that assets should be recorded at their historical cost, which is the amount paid to acquire them. This ensures that the assets are not overstated on the balance sheet. The going concern concept assumes that the business will continue to operate in the foreseeable future. This means that the assets are expected to be used in the business and will not be sold or disposed of in the near future.

Recording of Fixed Assets at Cost Ensures Adherence of