The practice of recording transactions at cost is called
A) cost classification.
B) the cost principle.
C) the valuation issue.
D) cost recognition.

Question

Quizplus · Accepted Answer

The cost principle is a fundamental accounting principle that states that assets and services should be recorded at their actual cost, which is known as historical cost. This means that transactions should be recorded based on the actual amount paid, rather than their fair market value or potential selling price. This practice ensures that financial statements reflect the actual amounts paid for assets and services, and provides a reliable basis for decision-making.

The Practice of Recording Transactions at Cost Is Called