The Historical Cost Principle Requires That When Assets Are Acquired

question 170

Multiple Choice

The historical cost principle requires that when assets are acquired, they be recorded at

• A) market value.
• B) the amount paid for them.
• C) selling price.
• D) list price.

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Definitions:

Transactions Costs

Expenses incurred when buying or selling goods and services, which can include fees, taxes, and other charges.

Buying And Selling

The basic actions of purchasing an asset and then selling it, fundamental processes in any market.

Operating Lease

A lease agreement allowing the use of an asset but does not convey rights of ownership of the asset.

Relatively Short

The term "relatively short" refers to a period of time that is short in comparison to other relevant timeframes or expectations.