Recording land at its cost rather than its appraisal value illustrates
A)the matching principle.
B)the realization principle.
C)the cost basis principle.
D)the full disclosure principle.

Question

Quizplus · Accepted Answer

Recording land at its cost rather than its appraisal value demonstrates the cost basis principle, which states that assets should be recorded based on the amount of cash paid or the cash equivalent of the property or service given in exchange at the time of acquisition. This principle ensures that the financial statements are based on objective and verifiable data, rather than subjective estimates or valuations. The matching principle refers to the matching of expenses with the corresponding revenues, and the realization principle deals with recognizing revenue when it's earned, regardless of when the cash is received. The full disclosure principle states that all relevant and material information should be disclosed in the financial statements or accompanying notes.

Recording Land at Its Cost Rather Than Its Appraisal Value