Historical cost principle: The historical cost concept of accounting (cost principle) states that assets should be recorded at its cost (purchased value), not at its fair value while preparing any financial statement because there is no availability of document regarding fair value as evidence for recording, till that item is not sold in the market. Therefore, the fair value of items is not used as the basis for all accounting measurement and reporting. Adjustment entries : Adjusting entries are those entries which are made at the end of the year to update the all balances in the financial statements to show the true financial information and to maintain the records according to accrual basis principle. To Identify: Historical cost concept required adjustments or not.

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Answer 1

Question

Chapter 3, Problem 6Q

To determine

Historical cost principle: The historical cost concept of accounting (cost principle) states that assets should be recorded at its cost (purchased value), not at its fair value while preparing any financial statement because there is no availability of document regarding fair value as evidence for recording, till that item is not sold in the market. Therefore, the fair value of items is not used as the basis for all accounting measurement and reporting.

Adjustment entries: Adjusting entries are those entries which are made at the end of the year to update the all balances in the financial statements to show the true financial information and to maintain the records according to accrual basis principle.

To Identify: Historical cost concept required adjustments or not.

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Answer 2

Question

Chapter 3, Problem 6Q

To determine

Historical cost principle: The historical cost concept of accounting (cost principle) states that assets should be recorded at its cost (purchased value), not at its fair value while preparing any financial statement because there is no availability of document regarding fair value as evidence for recording, till that item is not sold in the market. Therefore, the fair value of items is not used as the basis for all accounting measurement and reporting.

Adjustment entries: Adjusting entries are those entries which are made at the end of the year to update the all balances in the financial statements to show the true financial information and to maintain the records according to accrual basis principle.

To Identify: Historical cost concept required adjustments or not.

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Answer 3

Question

Chapter 3, Problem 6Q

To determine

Historical cost principle: The historical cost concept of accounting (cost principle) states that assets should be recorded at its cost (purchased value), not at its fair value while preparing any financial statement because there is no availability of document regarding fair value as evidence for recording, till that item is not sold in the market. Therefore, the fair value of items is not used as the basis for all accounting measurement and reporting.

Adjustment entries: Adjusting entries are those entries which are made at the end of the year to update the all balances in the financial statements to show the true financial information and to maintain the records according to accrual basis principle.

To Identify: Historical cost concept required adjustments or not.

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Answer 4

Question

Chapter 3, Problem 6Q

To determine

Historical cost principle: The historical cost concept of accounting (cost principle) states that assets should be recorded at its cost (purchased value), not at its fair value while preparing any financial statement because there is no availability of document regarding fair value as evidence for recording, till that item is not sold in the market. Therefore, the fair value of items is not used as the basis for all accounting measurement and reporting.

Adjustment entries: Adjusting entries are those entries which are made at the end of the year to update the all balances in the financial statements to show the true financial information and to maintain the records according to accrual basis principle.

To Identify: Historical cost concept required adjustments or not.

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Answer 5

Chapter 3, Problem 6Q

To determine

Historical cost principle: The historical cost concept of accounting (cost principle) states that assets should be recorded at its cost (purchased value), not at its fair value while preparing any financial statement because there is no availability of document regarding fair value as evidence for recording, till that item is not sold in the market. Therefore, the fair value of items is not used as the basis for all accounting measurement and reporting.

Adjustment entries: Adjusting entries are those entries which are made at the end of the year to update the all balances in the financial statements to show the true financial information and to maintain the records according to accrual basis principle.

To Identify: Historical cost concept required adjustments or not.

Answer 6

Chapter 3, Problem 6Q

To determine

Historical cost principle: The historical cost concept of accounting (cost principle) states that assets should be recorded at its cost (purchased value), not at its fair value while preparing any financial statement because there is no availability of document regarding fair value as evidence for recording, till that item is not sold in the market. Therefore, the fair value of items is not used as the basis for all accounting measurement and reporting.

Adjustment entries: Adjusting entries are those entries which are made at the end of the year to update the all balances in the financial statements to show the true financial information and to maintain the records according to accrual basis principle.

To Identify: Historical cost concept required adjustments or not.

Answer 7

Chapter 3, Problem 6Q

To determine

Historical cost principle: The historical cost concept of accounting (cost principle) states that assets should be recorded at its cost (purchased value), not at its fair value while preparing any financial statement because there is no availability of document regarding fair value as evidence for recording, till that item is not sold in the market. Therefore, the fair value of items is not used as the basis for all accounting measurement and reporting.

Adjustment entries: Adjusting entries are those entries which are made at the end of the year to update the all balances in the financial statements to show the true financial information and to maintain the records according to accrual basis principle.

To Identify: Historical cost concept required adjustments or not.

Answer 8

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Answer 9

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Answer 10

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Answer 11

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