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25 June, 02:25

Robert Rossini owner of Robert records also owns a personal reidence that cost 475000 but has a market value of 625000 during preparation of financial statements for Robert records the accounting principal most relevant to the presentation of Roberts home is

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  1. 25 June, 02:50
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    Robert Rossini owner of Robert records also owns a personal residence that cost 475000 but has a market value of 625000 during preparation of financial statements for Robert records. the accounting principal most relevant to the presentation of Roberts home is the Historical cost principle

    Explanation:

    According to the the historical cost principle. The cash value of an asset (The value of the asset at the time the asset is acquired) is recorded in the financial statement and no changes in the cash value can be in case of an increase in inflation or an increase in the market value of the Asset.

    In the above question the cash value of the Robert Rossin Residence is 475000 BUT the market value of the asset is 625000.

    Thus it is appropriate to say that this statement is an example of the Historical cost principle of Accounting
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