Multiple choice

As per cost concept, all assets are recorded in the books of accounts at

  1. purchase price

  2. market price

  3. purchase price including cost of acquisition, transportation, installation etc.

  4. None of these

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The cost concept requires that assets be recorded at their historical cost. This cost includes the actual purchase price plus all additional expenses like transportation and installation required to make the asset ready for use.