
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.
To Identify: Historical cost concept required adjustments or not.

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Chapter 3 Solutions
Financial Accounting
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