Historic cost

Historic cost

• A. Replacement cost
• B. Current market value
• C. Amount paid for an asset
• D. Depreciated value

Answer: (C)

Historic cost is the original amount paid to acquire an asset, including any directly attributable costs to bring it to usable condition. This becomes the base value recorded in the books and is the starting point for depreciation. It remains the original cost basis even as replacement costs or market values change over time, while the asset’s depreciated value reflects cost less accumulated depreciation. So the description that best matches historic cost is the amount actually paid for the asset.

Historic cost is the original amount paid to acquire an asset, including any directly attributable costs to bring it to usable condition. This becomes the base value recorded in the books and is the starting point for depreciation. It remains the original cost basis even as replacement costs or market values change over time, while the asset’s depreciated value reflects cost less accumulated depreciation. So the description that best matches historic cost is the amount actually paid for the asset.