Thirty years ago,Citywide Grocery Company purchased a building for its grocery store for $30,000.Based on inflation estimates,the amount of the building has been adjusted in the accounting records.The building is now reported at $75,000 in Citywide's financial statements.Which of the following concepts or principles of accounting is being violated?

Question

Quizplus · Accepted Answer

The cost principle states that assets should be recorded at their historical cost, and not adjusted for inflation or changes in market value. Therefore, adjusting the building to $75,000 is a violation of the cost principle.

Thirty Years Ago,Citywide Grocery Company Purchased a Building for Its