Historical cost has been the valuation basis most commonly used in accounting because of its
A) timelessness.
B) conservatism.
C) reliability.
D) accuracy.

Question

Quizplus · Accepted Answer

Historical cost is the valuation basis that is considered the most reliable because it is based on actual, verifiable transactions and costs. Other valuation methods, such as fair value, may be more subjective and based on estimates or market fluctuations. Therefore, historical cost is considered to provide a more accurate representation of a company's financial position. However, historical cost may not always be the most relevant or informative measure for decision-making purposes, particularly in rapidly changing or volatile markets.

Historical Cost Has Been the Valuation Basis Most Commonly Used