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1.> No consideration of price level changes over time by holding constant purchasing power
2.>The current market value of assets is ignored
3.> The provision of depreciation under historical cost system is not sufficient for the replacement of assets
4.>Profits are overstated during the period of inflation because revenues are recorded on current values whereas expenses at historical cost
5.> Chance of overstating profit by selling historical cost assets
6.> True performance of management may not view
Answered by: Md. Robiul Alam Fardeen
University Of Dhaka
Bangladesh
Wiki User
∙ 10y ago
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What is the definition of Historical Cost?
what is the definition of historical cost
What is historical cost?
Historical cost is the cost of an item when it was originally acquired. Historical cost does not reflect the change of value over time that an asset undergoes.
What is the difference between historical cost and replacement cost?
I believe historical cost is the original cost @ time of buying. Replacement cost is the price it would cost you @ present day values
Historical cost based depreciation tends to do what when there is inflation?
HIstorical cost based depreciation tends to increase profits when there is inflation
A cost that is previously incurred and irreversible is known as?
opportunity cost historical cost
What is cost principle?
Accounting concept that goods and services purchased should be recorded at their historical cost and not at their current market value.
What is historical concept?
historical concept means tangible assets are record on the the original price, in which an assets is acquired.
What are the Limitations to effective application of marketing concept in nigeria police force?
application of marketing concept
What are the different cost concept?
different cost concept
The concept that places limitations on the availability of a resource is known as?
scaricty
What is the statute of limitations on traffic violations in Oregon?
No, if you have been issued a ticket, the concept of a statute of limitations no longer applies.
What is the definition of Historical Cost?
what is the definition of historical cost
Limitations of cost accounting?
Some limitations of cost accounting include: Not capturing all intangible costs and benefits, such as employee morale or brand reputation. Tendency to focus on historical data rather than future-oriented analysis. Can be complex and time-consuming to implement accurately, leading to potential errors or biases in the information provided.
What is historical cost?
Historical cost is the cost of an item when it was originally acquired. Historical cost does not reflect the change of value over time that an asset undergoes.
Advantages of historical cost accounting?
strength of historical cost accounting
What are limitations of ohms law?
Resistance, like friction, is ultimately a vague concept.
Elaborate the cost concept is important for decision making?
Cost concept for Decision making ?
