Multiple choice

“Assets should be valued at the price paid to acquire them” is based on

  1. accrual concept

  2. cost concept

  3. money measurement concept

  4. realisation concept
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

“Assets should be valued at the price paid to acquire them” is based on cost concept. Assets are entered in the books of account at the price paid to acquire them and this cost rather than market value is the basis for subsequent accounting for the asset. The real worth of an asset changes with the passage of time but the assets are shown in books of account at cost and not at what they are worth.

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