Chad Jones is the sole owner and manager of Jones Glass Repair Shop. Jones purchased a truck, to be used in the business, for its market value of $35,000. Which of the following fundamentals requires Jones to record the truck at the price paid to buy it?

Question

Quizplus · Accepted Answer

The historical cost principle requires that assets be recorded at their actual cost rather than their market value or replacement cost. Therefore, Jones must record the truck at the price paid to buy it, which is its historical cost.

Chad Jones Is the Sole Owner and Manager of Jones