Thirty years ago,Star Grocer Corporation 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 Star Grocer'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 original cost. The adjustment of the building's cost based on inflation violates this principle. The building should be reported at its historical cost of $30,000, not the adjusted value of $75,000.

Thirty Years Ago,Star Grocer Corporation Purchased a Building for Its