The Principle That Indicates That Assets Should Be Reported at the Price

question 116

Multiple Choice

The principle that indicates that assets should be reported at the price received to sell an asset is the

• A) historical cost principle.
• B) fair value principle.
• C) full disclosure principle.
• D) consistency principle.

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Definitions:

Stockholders

Individuals or entities that own shares in a corporation, providing them ownership interest.

Prior Period Adjustments

Adjustments made to the financial statements to correct errors or omissions in the financials of previous reporting periods.

Unacceptable Accounting Practices

Methods or practices that are not in accordance with generally accepted accounting principles (GAAP) or ethical standards.

Salvage Value

The estimated resale value of an asset at the end of its useful life.