Three years ago ABC Company paid $4,500 for a new copier, which would cost $6,000 to replace today. If it is on the books at $4,500 this would be an example of using historical cost.

Question

Quizplus · Accepted Answer

Historical cost accounting records assets at their original purchase price, without adjusting for changes in market value, so the copier being on the books at $4,500 reflects its historical cost.

Three Years Ago ABC Company Paid $4,500 for a New