Which of the Following Statements Does NOT Apply to the Historical

question 78

Multiple Choice

Which of the following statements does NOT apply to the historical cost principle?

• A) Historical cost represents a value at a point in time.
• B) The principle does not apply to financial instruments.
• C) Historical cost results from a reciprocal or two-way exchange.
• D) Over time, historical cost becomes irrelevant in terms of predictive value.

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Definitions:

Tax Return

A form filed with a federal, state, or local tax collection agency detailing income, expenses, and other pertinent tax information, used to calculate tax liability.

Accounting Services

Professional services that deal with the recording, reviewing, and interpreting financial transactions and statements.

Tax Returns

Documents filed with a tax authority that report income, expenses, and other relevant tax information to calculate tax liability.

Income

Money received, especially on a regular basis, through work, investments, business, etc., for goods or services provided.