JAMB Accounts Principles of Accounts 2012 Paper

Concept:Assets are valued on the basis of the historical cost concept, which records them at their original purchase price.Explanation:The historical cost concept states that assets and liabilities should be recorded in the books at the amount originally paid or incurred.This value does not change with fluctuations in market price, though it may be adjusted for depreciation or impairment.The business entity concept separates the owner from the business, the periodicity concept divides business activities into time periods, and the materiality concept concerns the significance of transactions.Only the historical cost concept directly answers how assets of an organization are valued.Answer:A. historical concept (historical cost concept)