When historical cost is used in the accounting records, the book value of the asset is
A) the original cost.
B) the market value.
C) original cost less accumulated depreciation.
D) appraised value.

Question

Quizplus · Accepted Answer

When historical cost is used in the accounting records, the book value of the asset is the original cost less accumulated depreciation. This means that the asset is recorded in the financial statements at its original cost, and depreciation is deducted from that amount over time to reflect the estimated decrease in value due to use and wear and tear. The market value, appraised value or any other valuation method is not relevant in this case.

When Historical Cost Is Used in the Accounting Records, the Book