ACC 304 All Assignments ACC 304 All Assignments | Page 141

d. property and equipment.
S30. Historical cost is the basis advocated for recording the
acquisition of property, plant, and equipment for all of the following
reasons except
a. at the date of acquisition, cost reflects fair market value.
b. property, plant, and equipment items are always acquired at their
original historical cost.
c. historical cost involves actual trans-actions and, as such, is the most
reliable basis.
d. gains and losses should not be anticipated but should be recognized
when the asset is sold.
S31. To be consistent with the historical cost principle, overhead
costs incurred by an enterprise constructing its own building should be
a. allocated on the basis of lost production.