Question

The money value for which assets are acquired or manufactured _______________.

• A. Cost
• B. Profit
• C. Expenses
• D. Income

Answer 1

The correct option is A Cost

Accounting of the transactions is done on the basis of historical cost. Hence market value does not play any role while accounting the transaction.

Any asset which is acquired by paying certain amount, the value which are actually spent is considered the cost and accordingly entry need to be passed.