Historical Cost Is the Basis Advocated for Recording the Acquisition

question 128

Multiple Choice

Historical cost is the basis advocated for recording the acquisition of property, plant, and equipment for all of the following reasons except

• A) at the date of acquisition, cost reflects fair value.
• B) property, plant, and equipment items are always acquired at their original historical cost.
• C) historical cost involves actual trans?actions and, as such, is the most reliable basis.
• D) gains and losses should not be anticipated but should be recognized when the asset is sold.

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Definitions:

Methods

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Evaluation

The systematic process of examining a program, concept, or object to judge its effectiveness, strengths, and weaknesses, often in comparison to standards or benchmarks.

Proposal Structure

The organization and layout of a proposal document, typically including sections such as introduction, methodology, and budget.

Memo Format

This term describes a specific, concise document format usually used for communication within an organization, characterized by a direct style and typically addressing a single subject.