Final answer:
The true statement about generally accepted accounting principles is that the cost principle requires expenditures for equipment to be recorded as a fixed asset rather than as an expense. Fixed costs, such as rent and equipment, don't change with production levels and provide future economic benefits.
Step-by-step explanation:
The student's question relates to the understanding of generally accepted accounting principles (GAAP). Among the statements provided, the correct statement is: 1) The cost principle dictates that an expenditure for equipment be recorded as a fixed asset rather than as an expense. This principle under GAAP dictates that fixed inputs, such as capital expenditures on equipment, should be recorded as a fixed asset and not an immediate expense due to their future economic benefit.
Further explaining, fixed costs such as rent on a factory or machinery, are expenditures that do not change with the level of production and are typically considered capital expenditures. These costs are capitalized on the balance sheet as fixed assets and are not expensed until they are used and start providing economic benefit through a process known as depreciation.
The conservatism principle actually prescribes that when there are alternatives, one should choose the solution that will be least likely to overstate assets and income. Hence, the fourth statement provided by the student is incorrect as the conservatism principle does not suggest recognizing revenues as soon as possible.