Sawyer Corporation purchased land in 2009 for $490,000.In 2015,it purchased a nearly identical parcel of land for $660,000.In its 2015 balance sheet,Sawyer valued these two parcels of land at a combined value of $1,320,000.By reporting the land in this manner,Sawyer Corporation has violated which of the following?

Question

Quizplus · Accepted Answer

The cost principle states that assets should be recognized and reported at their historical cost. However, by valuing the two parcels of land at a combined value of $1,320,000, Sawyer Corporation has violated the cost principle because the reported value exceeds the historical cost of the land.

Sawyer Corporation Purchased Land in 2009 for $490,000