Assets are initially recorded at cost.What assumption/concept underlies this procedure?
A) Accounting entity
B) Monetary
C) Historical cost
D) Going concern

Question

Quizplus · Accepted Answer

The historical cost concept assumes that assets should be initially recorded at the cost at which they were acquired. This means that the cost of the asset is recorded on the balance sheet and remains at this initial cost until it is sold or disposed of. This concept is important for providing accurate and reliable financial information to users of the financial statements.  The accounting entity, monetary, and going concern concepts are important to accounting, but they do not directly relate to the initial recording of assets at cost.

Assets Are Initially Recorded at Cost