Under Generally Accepted Accounting Principles (GAAP),a firm's assets are reported at:
A)market value.
B)liquidation value.
C)market value less accumulated depreciation.
D)historical cost less accumulated depreciation.
E)liquidation value less accumulated depreciation.

Question

Quizplus · Accepted Answer

Under GAAP, a firm's assets are reported at historical cost less accumulated depreciation. This means that the value of the asset is recorded at the amount originally paid for it, and then reduced by the amount of depreciation that has been recorded over time. This approach values assets more conservatively and accurately reflects their true economic value over time.

Under Generally Accepted Accounting Principles (GAAP),a Firm's Assets Are Reported