Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 16 - No. 34)
What is the 'Historical Cost Principle'?
Assets are recorded at their current market value.
Assets are recorded at their original cost.
Assets are recorded at the price the company expects to sell them for.
Assets are recorded at their replacement cost.
Explanation
The historical cost principle states that assets are recorded at their original cost at the time of acquisition.
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