When historical cost is used to record equipment, it would appear as the:
A) original cost in an asset account on the balance sheet.
B) residual value in the Stockholders Equity account.
C) residual value in an asset account on the balance sheet.
D) original cost on the income statement.

Question

Quizplus · Accepted Answer

Historical cost refers to the original monetary value of an asset. When equipment is recorded at historical cost, it appears as its original purchase price in an asset account on the balance sheet, reflecting the actual cash or cash equivalent paid for the asset at the time of its acquisition.

When Historical Cost Is Used to Record Equipment, It Would