Question

Cost concept envisages the recording of the following in the books of accounts.

• A. An asset its market prize
• B. An asset at its cost
• C. An asset at average cost
• D. All of the above

Answer 1

The correct option is B An asset at its cost

The cost concept states that an asset should be recorded at its historical cost and not at the market value.
As per Cost Concept, the fixed asset is recorded its historical cost or purchase price plus expenses incurred to use it.
The fixed asset is never recorded at its market price due to this concept only.