Assets are recorded at cost when they are purchased, but the asset accounts are adjusted each year to reflect changes in market value.

Question

Quizplus · Accepted Answer

Assets are not typically adjusted to reflect changes in market value. The cost at which they are acquired is generally considered their value for accounting purposes, unless there is evidence of a permanent decrease in value due to obsolescence, damage, or other factors. This concept is known as historical cost accounting.

Assets Are Recorded at Cost When They Are Purchased, but the Asset