A-LevelAccountingFinancial reporting and ethical considerations9706/12 · May/June 2013 · Q61 Mark

A trader recently purchased a non-current asset for his business at a cost of $6500. A friend told him he could buy a similar asset on-line for $5000. The trader is now unsure how to value the asset in the books of account. Which principle should the trader apply?

Aaccruals

Bbusiness entity

Chistorical cost

Dmateriality

✓ Correct answer

C: historical cost

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Topic: Financial reporting and ethical considerations, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, May/June 2013 Paper 1 Variant 2, question 6.

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