Mason Company purchased land for $30,000. The president of Mason Company believes that the land is actually worth $35,000. The land can be recorded at $35,000.

Question

Quizplus · Accepted Answer

According to the cost principle of accounting, assets should be recorded at their cost at the time of purchase, not at their perceived current value. Therefore, the land should be recorded at its purchase price of $30,000.

Mason Company Purchased Land for $30,000