Asked by
Sophie Corley
on Oct 16, 2024Verified
The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange,is the:
A) Accounting equation.
B) Measurement (Cost) principle.
C) Going-concern assumption.
D) Realization principle.
E) Business entity assumption.
Measurement Principle
The accounting principle that determines the criteria under which financial elements are quantified in the financial statements.
Actual Cost
The actual expenditure incurred on goods or services, including all amounts spent to acquire them, minus any discounts or rebates.
Cash-Equivalent Amount
The value of an asset that can easily be converted into a known amount of cash within a short period.
- Recognize the importance of historical cost and measurement in accounting.
Verified Answer
KC
Learning Objectives
- Recognize the importance of historical cost and measurement in accounting.