Advantages of Using Historical Cost as the Basis of Valuation

question 72

Multiple Choice

Advantages of using historical cost as the basis of valuation of property, plant, and equipment include all of the following except

• A) it is a very reliable valuation
• B) gains and losses from holding the asset are recognized in the period of value change
• C) cost equals the fair market value at the date of acquisition
• D) it is consistent with the valuation of many other assets, liabilities, and stockholders' equity

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Definitions:

Self-conscious Emotion

Emotions that involve self-reflection and awareness of oneself in the context of social norms, such as embarrassment, pride, or guilt.

Erikson

Erik Erikson was a developmental psychologist and psychoanalyst known for his theory on the psychosocial development of human beings.

Trust and Mistrust

Fundamental stages in human psychological development, focusing on an individual's ability to trust their environment and others versus feeling insecurity and doubt.

Social Standard

Accepted behaviors, norms, or criteria within a society or group, against which individuals' actions and beliefs are measured.