For which of the following accounts would the use of historical cost normally be a greater limitation than for the other three?
A) Cash
B) Accounts Receivable
C) Plant and Machinery
D) Prepaid Rent

Question

Quizplus · Accepted Answer

Plant and machinery are assets that are likely to appreciate or depreciate in value over time. Using historical cost accounting for plant and machinery may not accurately reflect their current fair value or replacement cost. In contrast, cash and prepaid rent are relatively stable in value, and accounts receivable can be written off if they become uncollectible.

For Which of the Following Accounts Would the Use of Historical