Question

Recording of fixed assets at cost ensures adherence to _________.

• A. Dual aspect concept
• B. Materiality concept
• C. Cost concept
• D. All of the above

Answer 1

The correct option is C Cost concept

The cost concept requires that all assets are recorded in the book of accounts at their purchase price, which includes cost of acquisition, transportation, installation and making the asset ready to use.

The concept of cost is historical in nature as it is something, which has been paid on the date of acquisition and does not change year after year.