Valuation of Assets Under Generally Accepted Accounting Principles

question 26

Essay

Valuation of assets under generally accepted accounting principles
Under generally accepted accounting principles,the assets owned by a business are reported in the balance sheet at their historical cost.Identify and briefly explain two accounting principles other than the cost principle that support the valuation of assets at cost in the balance sheet.

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Definitions:

Pharynx

The part of the throat behind the mouth and nasal cavity, responsible for the passage of food to the esophagus and air to the larynx.

Esophagus

A muscular tube that conveys food from the mouth to the stomach.

Mouth

The opening in the body of most animals through which food is taken in, beginning the process of digestion.

Gallbladder

A small organ located under the liver, which stores and concentrates bile, a digestive fluid produced by the liver.