Copyright

Historical Cost Accounting: Definition, Method & Advantages

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Historical cost is the _____.

Create Your Account To Take This Quiz

As a member, you'll also get unlimited access to over 79,000 lessons in math, English, science, history, and more. Plus, get practice tests, quizzes, and personalized coaching to help you succeed.

Try it risk-free
Try it risk-free for 30 days. Cancel anytime
Already registered? Log in here for access

1. Why is historical cost useful as an accounting method?

2. ABC Company buys a used piece of machinery for its warehouse. The machine cost $100,000 to purchase and $10,000 to have installed. ABC got a great deal on this piece of machinery; a brand new machine would have cost $150,000. Under historical cost accounting principles, what is the value of the machinery that will be recorded as an asset?

Create your account to access this entire worksheet
A Premium account gives you access to all lesson, practice exams, quizzes & worksheets
Access to all video lessons
Quizzes, practice exams & worksheets
Certificate of Completion
Access to instructors
Create an account to get started Create Account

About This Quiz & Worksheet

Determine what you know about historical cost accounting with the quiz and attached worksheet. You'll answer questions on things like what historical cost is and why it is useful.

Quiz & Worksheet Goals

These tools will show if you're able to accomplish the following:

  • Interpret historical cost accounting principles in a given scenario
  • Identify a proper definition for historical accounting
  • Understand how to find the value of an asset with regard to historical accounting

Skills Practiced

Use these resources to practice the following study skills:

  • Reading comprehension - ensure that you draw the most important information from the related lesson on historical cost accounting
  • Making connections - use understanding of the concept of historical accounting and how it is connected to the value of an asset
  • Interpreting information - verify that you can read information regarding what historical accounting is and interpret it correctly
  • Information recall - access the knowledge you've gained regarding how this principle is useful

Additional Learning

Discover more about this subject with the lesson called Historical Cost Accounting: Definition, Method & Advantages. The lesson will adhere to the following study points:

  • Apply historical accounting principles
  • Explain what it means for financial statements to be comparable
  • Identify the advantages of historical cost accounting
Support