WAEC Accounting 2011 Paper

Concept:The cost concept is an accounting principle that requires assets to be recorded at their original acquisition cost.It is also known as the historical cost concept.Explanation:Under the cost concept, the value shown in the books for an asset is the amount actually paid to acquire it.This value does not change simply because the asset's current market value rises or falls over time.For instance, if land is purchased for $\text{Rs. }5{,}00{,}000$, it remains recorded at $\text{Rs. }5{,}00{,}000$ even if its market value rises to $\text{Rs. }8{,}00{,}000$.Market value is considered only when the asset is sold, revalued, or involved in a new transaction.Therefore, the principle that assets are not recorded at their current market value is the cost concept.Answer:C. cost