Which of the following is an argument against using historical cost in accounting?
A) Fair values are more relevant.
B) Historical costs are based on an exchange transaction.
C) Historical costs are reliable.
D) Fair values are subjective.

Question

Quizplus · Accepted Answer

The argument against using historical cost in accounting is that fair values are more relevant. This is because fair values reflect current market conditions and are more useful in making economic decisions. Historical costs, on the other hand, are based on past transactions and do not necessarily reflect current market values. Therefore, fair values are considered to be more reliable in measuring assets and liabilities. B, C, and D are not arguments against using historical cost.

Which of the Following Is an Argument Against Using Historical