Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Fundamental Accounting Equation

Financial Accounting

1. Introduction to Accounting

Fundamental Accounting Equation

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Multiple Choice

Which accounting principle states that acquired assets and services should be recorded at their actual cost?

Historical Cost Principle

Matching Principle

Full Disclosure Principle

Revenue Recognition Principle

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Verified step by step guidance

Understand the question: The problem is asking which accounting principle requires that acquired assets and services be recorded at their actual cost. This involves identifying the principle that emphasizes recording transactions based on their original monetary value.

Review the options provided: The options include Historical Cost Principle, Matching Principle, Full Disclosure Principle, and Revenue Recognition Principle. Each principle has a specific purpose in accounting.

Define the Historical Cost Principle: This principle states that assets and services should be recorded at their original purchase price or actual cost, regardless of changes in market value over time. It ensures consistency and reliability in financial reporting.

Compare the other principles: The Matching Principle relates to recognizing expenses in the same period as the revenues they help generate. The Full Disclosure Principle requires that all relevant financial information be disclosed in financial statements. The Revenue Recognition Principle dictates when revenue should be recognized in the accounting records.

Conclude that the Historical Cost Principle is the correct answer: Based on the definitions and purposes of the principles, the Historical Cost Principle aligns with the requirement to record assets and services at their actual cost.