Why Would a Company Recognize the Cost of an Asset

Multiple Choice

Why would a company recognize the cost of an asset on its balance sheet rather than treat it as an expense on the date it is acquired?

A) Conservatism requires this recognition.
B) Matching requires costs to be matched against the related revenues of the asset.
C) Strictly to record the amount in the most economically favorable manner possible for the company.
D) The stable dollar concept will not allow inflation to be added to expenses, but does allow inflation to be added to assets.