Question

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

• A. An asset at its cost
• B. Knowledge acquired by business executive
• C. Changes effected because of some political events.
• D. None of the above

Answer 1

Answer: (A)

An asset at its cost

The cost concept requires that, all assets are recorded in the book of accounts at their purchase price.

The purchase price includes cost of acquisition, transportation, installation and making the asset ready to use.

In the subsequent years to, the price remains the same (minus depreciation charged). The market price of the asset is not taken into consideration.