Which concept should be applied when reporting a piece of land that was bought for $50,000 five years ago,and which would probably now sell for $80,000?
A)The cost principle.
B)The asset principle.
C)The separate entity concept.
D)The duality of effects.

Question

Quizplus · Accepted Answer

The cost principle states that assets should be recorded at their historical cost, not their current market value. Therefore, the land should still be reported at its original cost of $50,000, even if it would sell for $80,000 now.

Which Concept Should Be Applied When Reporting a Piece of Land