You acquired goods with a normal selling price of P10,000 at a discounted price of P8,000. You recorded the goods at P8,000. You are applying which of the following concepts?
Understand the Problem
The question is asking to identify the accounting concept or principle applied when goods are recorded at a discounted price rather than at their normal selling price.
Answer
historical cost
The final answer is historical cost.
Answer for screen readers
The final answer is historical cost.
More Information
Recording the goods at P8,000 reflects the historical cost concept, which means the transactions are recorded at their acquisition cost.
Tips
Students often confuse historical cost with fair market value, but historical cost involves recording the actual cost at the time of purchase.
Sources
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