The historical cost measurement method requires that when assets are acquired, they be recorded at
A) appraisal value.
B) the amount paid.
C) the amount the asset could be sold for.
D) list price.

Question

Quizplus · Accepted Answer

The historical cost measurement method requires that assets be recorded at the amount paid for them. This is because the historical cost of an asset represents the actual expenditure incurred to acquire it, and is considered a more objective and reliable basis for measurement than appraisal value or list price, which may be subject to manipulation or estimation errors. The amount the asset could be sold for is not relevant to historical cost accounting, as it reflects the market value of the asset at a point in time after it has been acquired, and may be affected by various factors such as supply and demand, depreciation, obsolescence, and changes in economic conditions.

The Historical Cost Measurement Method Requires That When Assets Are