Answer to Question 1
A
Explanation: A) The cost principle highlights the proposition that value is not the focus of accounting and is not represented in financial statements. To avoid the subjectivity of value assessments, the cost principle is used to measure, record, and report transactions. In applying the cost principle, costs are measured objectively on a cash or cash-equivalent basis. In other words, amounts shown on financial statements reflect historical costs, not current values.
Answer to Question 2
T