Comparing and contrasting the historical cost]principle and current (fair) market value, is knowledge of anasset's current market value ever useful and, if so, when?

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Collen VonLv2

28 Sep 2019

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Question 1.1. (TCO A) Listed below are several informationcharacteristics and accounting principles and assumptions. Each ofthese items is assigned a number. Match the number of each with theappropriate phrase that states its application. Note: Each answermay be used multiple times.

Potential Matches: 1 : Historical cost principle

2 : Conservatism

3 : Materiality

4 : Industry practices or fair value principle

5 : Full disclosure principle

6 : Revenue recognition principle

Answer : Fair value changes are not recognized in the accountingrecords :

Lower of cost or market is used to value inventories :

Repair tools are expensed when purchased :

Agricultural companies use fair value for purposes of valuingcrops :

All significant post balance sheet events are reported :

Revenue is recorded at point of sale

limecattle174

The total cost of an asset less its accumulated depreciation is called:

a. Historical cost

b. Book value

c. Present value

d. Current (market) value

e. Replacement cost

ambertiger96

9 Assets are initially recorded at: a. Fair market value b. Replacement cost C. Historical cost d. Residual value e. None of the above The correct answer is 'c'.

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