Final answer:
The principle being referred to in this question is the historical cost principle, which requires assets to be recorded at the amount exchanged at the time of purchase.
Step-by-step explanation:
The principle being referred to in this question is the historical cost principle. This principle states that assets should be recorded on a company's balance sheet at the amount of money or other consideration given in exchange for them at the time of their acquisition.
For example, if a company purchases a piece of office equipment for $1,000, the historical cost principle requires that the equipment be recorded at $1,000 on the balance sheet.
This principle provides a reliable and objective basis for valuing and reporting assets, as it is based on the actual amount exchanged at the time of purchase.