Asked by Ashley Lowell on Jun 25, 2024
Verified
Two measurement principles are historical cost and current value.
Measurement Principles
Guidelines that dictate how the economic activities of a company are captured in its financial statements.
Historical Cost
The original monetary value of an asset, reflecting the purchase or production cost without adjustments for inflation or market value changes.
Current Value
The present worth of an asset or liability, taking into account factors such as market conditions and depreciation.
- Identify the elements of financial statements and their measurements.
Verified Answer
RJ
Ryan James BayerJun 30, 2024
Final Answer :
True
Explanation :
Historical cost and current value are indeed two fundamental measurement principles used in accounting and financial reporting. Historical cost refers to the original monetary value of an economic item, while current value reflects the amount of cash or its equivalent that could be obtained by selling an asset in an orderly transaction between market participants at the measurement date.
Learning Objectives
- Identify the elements of financial statements and their measurements.