Historical cost:
A)is used in the U.S.to value all business assets.
B)is equal to the amount of cash paid minus the dollar value of all noncash considerations also given in the exchange.
C)is a verifiable measure that is relatively free from bias.
D)is the amount that the business could sell an asset for.

Question

Quizplus · Accepted Answer

Historical cost is the original cost of acquiring an asset and is a verifiable measure that is relatively free from bias. Option A is incorrect because historical cost is not used to value all business assets in the U.S. Option B is incorrect because noncash considerations may not always be subtracted from the cash paid. Option D is incorrect because it refers to the fair value of an asset, not historical cost.

Historical Cost