Accounting for IGCSE & O level - Advanced Principles (Section 4 - No. 47)

What does the historic cost principle require?

Assets and expenses should be recorded at their current market value.

Assets and expenses should be recorded at their original purchase price.

Assets should be depreciated at the replacement cost.

Expenses should be recorded at the selling price.

The historic cost principle dictates that assets and expenses should be recorded at their original cost.