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:

Qualitative Factors

Qualitative factors are non-numeric variables or considerations that affect decision-making, such as company reputation or customer satisfaction.

Buying

The process of acquiring goods or services, typically for business operations or personal use.

Employee Morale

The overall satisfaction, outlook, and feelings of well-being that an employee experiences at their workplace.

By-products

Secondary products that are produced incidentally in the process of manufacturing the main product, often with economic value and varying applications.