NCERT · Class 11 · Accountancy · Theory Base of AccountingFixed assets are recorded in the books of accounts at their purchase price, ignoring current market value, based on which concept?
Step-by-Step Solution
The Cost Concept (Historical Cost Concept) requires fixed assets to be recorded in the books of accounts at the price at which they were acquired, regardless of market fluctuations.
Detailed Options Breakdown
Option : Going Concern Concept
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Theory Base of Accounting.
Option 1: Cost Concept (Correct Answer)
Correct choice. Refer to the step-by-step verified solution guidelines above for details.
Option 2: Conservatism Concept
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Theory Base of Accounting.
Option 3: Consistency Concept
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Theory Base of Accounting.
💡 Study Guide: This question tests core syllabus concepts from Theory Base of Accounting. For formulas, key summaries, and mock exam reference guides, read the full Theory Base of Accounting Revision Notes.