The Selection of Historical Cost Over Current Value as the Attribute

question 182

Multiple Choice

The selection of historical cost over current value as the attribute to be measured for assets is an example of the trade-off of

• A) Reliability over relevance
• B) Costs over benefit
• C) Comparability over consistency
• D) Understandability over verifiability

---

Definitions:

Retained Earnings Statement

A financial report detailing the variations in retained profits over a definite time frame.

Depreciation Expense

The allocation of the cost of tangible assets over their useful lives as an expense to reflect their usage and wear and tear.

Stock Dividend

Additional shares are issued to shareholders by a corporation as a payment, rather than giving out cash.

Par Value Common Stock

The nominal or face value assigned to common stock shares in the corporation's charter, not necessarily reflecting their market value.