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Going Concern Concept

If a machiner...

Question

If a machinery is purchased for Rs.1,00,000 the asset would be recorded in the books at Rs.1,00,000 even if its market value at that time happens to be Rs.1,40,000. In case a year after, the market value of this assets comes down to Rs.90,000, it will ordinarily continue to be shown at Rs.1,00,000 and not at Rs.90,000 due to _________________.

A

Realization concept

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B

Present value concept

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C

Cost concept

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D

Money measurement concept

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Solution

The correct option is C Cost concept
Cost Concept states that the assets shall be recorded at their historical cost.

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Similar questions

Q. If a machinery is purchased for Rs. 1,00,000, the asset would be recorded in the books at Rs. 1,00,000 even if its market value at that time happens to be Rs. 1,40,000. In case a year after, the market value of this asset comes down to Rs. 90,000, it will ordinarily continue to be show at Rs. 1,00,000 and not at Rs. 90,000 due to _______________.

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