Which accounting principle requires that assets be recorded at their original cost?

• A. Historical Cost
• B. Accrual Principle
• C. Going Concern
• D. Objectivity Principle

Answer: (A)

The main idea here is how assets are measured on the books. The historical cost principle requires recording assets at the amount originally paid to acquire them, or their original cost. This provides a verifiable and objective basis for asset values, making the financial statements reliable and comparable over time. Depreciation or impairment may adjust the asset’s book value later, but the starting point remains the original cost.

The other concepts aren’t about how assets are valued. The accrual principle governs when revenues and expenses are recognized, not the measurement of asset value. The going concern assumption relates to the business’s continued operation into the foreseeable future, not asset pricing. The Objectivity Principle supports using verifiable evidence for accounting data, which aligns with using original cost as a reliable measure, but it does not itself mandate recording assets at cost the way historical cost does.