Question

Cost concept envisages the recording of which of the following in the books of accounts?

• A. An asset at its cost
• B. Knowledge and will acquired by the business executive
• C. Changes effected because of some political events
• D. All of the above

Answer 1

The correct option is A An asset at its cost

Cost concept envisages the recording of an asset at its cost. Cost concept also known as historical cost concept states that the asset should be recorded at the cost at which it was acquired i.e., Historical cost. Knowledge acquired can not be recorded in books of accounts because it can not be expressed in monetary terms.