Most assets must be reported on the balance sheet at
A) their current replacement cost.
B) fair market value.
C) an amount estimated by the company's management.
D) historical cost.

Question

Quizplus · Accepted Answer

Most assets are reported on the balance sheet at historical cost, which is the original purchase price plus any associated costs of acquiring and preparing the asset for its intended use. This is in accordance with Generally Accepted Accounting Principles (GAAP) and provides a reliable and objective measure of the asset's value. While fair market value may be used in certain circumstances, such as when an asset has significantly appreciated in value, historical cost is the default method for reporting assets on the balance sheet.

Most Assets Must Be Reported on the Balance Sheet at