The principle that states that assets acquired by the business should be recorded at their actual price is the:

Question

Quizplus · Accepted Answer

The cost assumption, also known as historical cost principle, states that assets should be recorded at their original acquisition cost. This principle ensures that financial statements are objective, reliable, and can be compared from one period to another. Therefore, option C is the correct answer. The objectivity assumption refers to the notion that financial information should be free from bias or personal opinion, while the stable monetary unit assumption assumes that the value of money is constant over time. The reliability assumption is a broader concept that assumes that financial reporting should be trustworthy and accurate, but it is not directly related to the cost principle.

The Principle That States That Assets Acquired by the Business