Which Statement Below Is TRUE About the Cost Principle

question 37

Multiple Choice

Which statement below is TRUE about the cost principle?

• A)The cost principle says that all costs associated,directly or indirectly,with buying and using a long-term asset should be permanently capitalized.
• B)The cost principle says that all costs reasonable and necessary to place an asset into a working condition should be capitalized.
• C)The cost principle says that all costs associated with purchasing a long-term asset should be expensed in the period of the purchase.
• D)The cost principle says that only the cash paid to acquire a long-term asset should be capitalized.

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Definitions:

QBO Check Register

A feature in QuickBooks Online that allows users to view and manage all transactions from a checking account, similar to a traditional checkbook register but in a digital format.

Credit Register

A ledger or record keeping system that tracks credit transactions, including purchases and payments on account.

Bank Errors

Mistakes made by a bank in the recording of transactions, which can include discrepancies in account balances and unauthorized transactions.

Cash Account

A cash account refers to a brokerage account where the investor must pay the full amount for securities purchased, as opposed to buying on margin.