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Which of the following is an example of where the historic cost convention should be applied?
Suggested Answer: D, E
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38 comments · newest first
HE
Hermila
11 months ago
Not sure about this... what if prices keep changing?
VE
Veronika
11 months ago
I agree, B is the clear choice here!
LO
Lou
12 months ago
Wait, can we really ignore current prices? Seems off.
MO
Mozelle
12 months ago
Definitely B! Costs should reflect what was paid.
ES
Essie
1 year ago
Historic cost applies to raw materials, right?
IR
Irving
1 year ago
I’m a bit confused, but I think research and development costs might not fit the historic cost convention since they can be quite subjective.
RO
Ronald
1 year ago
I practiced a similar question where we had to identify when to use historical costs, and I feel like it might be option D because it involves changes in valuation methods.
RE
Rene
1 year ago
I'm not entirely sure, but I remember something about bad debts being more about estimates rather than historical costs.
AN
Annamae
1 year ago
I think the historic cost convention applies to actual transactions, so maybe it's related to option B with the raw materials?
CA
Carrol
1 year ago
This seems like a straightforward strategic planning question. I'll start by thinking about the overall goals of the firm, which are usually addressed first in the planning process.
RA
Rasheeda
1 year ago
Hmm, I'm a bit unsure about this one. I know IPsec is related to VPNs, but I'm not sure which of these technologies specifically works with the stateful failover aspect.
TR
Trinidad
1 year ago
Hmm, I'm a bit confused. I know the plugin is for internationalization, but I'm not sure how the articles are actually linked together. I'll have to think this through carefully.
PA
Paris
1 year ago
Okay, let me see. Automatic scaling and pausing during inactive periods - that sounds like the serverless option to me, so I'm going to go with C.
CI
Ciara
1 year ago
I'm going with option B, because I'm historicLOLly inclined to stick to the original costs. Get it? 'Historicly'? Okay, I'll see myself out.
MA
Malinda
1 year ago
User 3: Agreed, the historic cost convention should be applied in this situation.
GU
Gussie
1 year ago
User 2: Yeah, sticking to the original costs is important in this case.
LA
Latanya
1 year ago
User 1: I think option B is the right choice.
IO
Iola
1 year ago
Research and development? Come on, that's clearly a cost that should be expensed, not capitalized under the historic cost convention.
WE
Werner
1 year ago
Haha, the bad debt question is a classic trick! You can't use historic cost for that, it's all about estimating future losses.
CE
Celeste
1 year ago
User 3: Actually, I believe the correct answer is D) A change to the method used to value inventory and work in progress.
SH
Shaniqua
1 year ago
User 2: No, that's not right. It should be C) Expenditure on research and development.
SC
Scarlet
1 year ago
User 1: I think the answer is B) Raw materials purchased for $2.50 per kg now costing $2.60 per kg.
TI
Timmy
1 year ago
Definitely option B. The historic cost convention requires us to use the original purchase price, not the current market value.
TI
Timmy
1 year ago
It's crucial to follow the guidelines of the historic cost convention to accurately reflect the financial position of the company.
CU
Curtis
1 year ago
Using the original purchase price is important in maintaining consistency with the historic cost convention.
RO
Rodrigo
1 year ago
I agree, option B is the correct choice for applying the historic cost convention.
MA
Magda
2 years ago
I think the historic cost convention should be applied to the raw materials purchased for $2.50 per kg. The cost hasn't changed, so we should stick to the original price.
AL
Allene
1 year ago
I see your point, but what about the change in the method used to value inventory and work in progress?
GE
Geoffrey
1 year ago
I think the research and development expenditure should be considered under the historic cost convention.
DA
Dannette
1 year ago
But what about the potential bad debt of 8,000? Shouldn't that also follow the historic cost convention?
BL
Blossom
1 year ago
I agree, sticking to the original price for raw materials makes sense.
KA
Kara
1 year ago
I think option C is not a suitable example, as expenditure on research and development is not typically subject to the historic cost convention.
MA
Margart
1 year ago
I see your point, but I believe option B is the most straightforward example for applying the historic cost convention.
MA
Martha
1 year ago
I think option A could also be a valid example, as it involves a potential bad debt that was recorded at its original cost.
SY
Sylvie
1 year ago
I agree, option B is the correct example for applying the historic cost convention.
RI
Rima
2 years ago
Why do you think that?
VI
Vincent
2 years ago
I disagree, I believe it should be applied to option A.
RI
Rima
2 years ago
I think the historic cost convention should be applied to option B.