Assets
Assets are economic resources that are owned by the business and are expected to provide positive future cash flows.
Assets
Cost Principle
Going-Concern
Assumption
Objectivity
Principle
Stable-Dollar
Assumption
These accounting principles support cost as the basis for asset valuation.
The Cost (Historical Cost) Principle
Accounting cost concept states that all assets are recorded in the books of accounts at their purchase price, which includes cost of acquisition, transportation and installation and not at its market price, i.e. original cost. It means that fixed assets like building, plant and machinery, furniture, etc are recorded in the books of accounts at a price paid for them.
This is the figure that appears on the source document for the transaction in almost
all cases.
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