Accounting for IGCSE & O level - Advanced Principles (Section 1 - No. 22)
What does the historical cost principle state?
Assets and expenses should be recorded at their market value.
Assets and expenses should be recorded at their original cost.
Financial statements should be prepared at regular intervals.
Businesses must maintain separate accounting records.
Explication
The historical cost principle states that assets and expenses should be recorded at their original cost.