The historical cost principle is used to Select one a Aid ma

The historical cost principle is used to: Select one: a. Aid management in controlling costs. b. Record transactions and events at fair market value. c. Record transactions and events at their original cost. d. Calculate cost of goods sold.

Solution

Answer: Option [c]. Record transactions and events at their original cost.

Explanation:

The historical cost principle advocates recording of all transactions at their original or nominal value. This means that all assets and liabilities/equity are recorded at their orginal transaction cost.