Question

The use of acquisition cost as a valuation method is justified on the basis that acquisition cost is: Select one: a. relevant b. timely c. subjective d. objective

Answer 1

Answer: d. objective

Step-by-step explanation:

The Acquisition cost of an asset is the total cost that the company incurred for the asset. It is objective because it does not change and is not influenced by the Accounting method used by the company.

It can therefore be used as a valuation method for the asset regardless of which company it is sold to and that makes it very advantageous for comparison and other calculations.