When Historical Cost Is Used in the Accounting Records, the Book

question 141

Multiple Choice

When historical cost is used in the accounting records, the book value of the asset is

• A) the original cost.
• B) the market value.
• C) original cost less accumulated depreciation.
• D) appraised value.

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Definitions:

Entrepreneurship

The act of starting and managing a business venture, along with any of its risks, in order to make a profit and innovate in the market.

Financial Capital

The money, credit, and other forms of funding that businesses use to invest in resources for future growth.

Opportunity Cost

Waiving prospective gains from various alternatives by settling on one option.

Foregone Alternative

The option or course of action that is given up when another is chosen; closely related to the concept of opportunity cost.