The historical cost principle requires that when assets are acquired, they are recorded at

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The historical cost principle requires that assets are recorded at their original cost, which is typically the price paid to acquire or produce the asset. This method provides a reliable and objective way to value assets and ensures that financial statements accurately represent the transactions and events of a business. Appraisal value, market price, and book value may be relevant to certain accounting processes, but they are not the basis for recording asset values under the historical cost principle.

The Historical Cost Principle Requires That When Assets Are Acquired