Question

Which of the following statements is correct?

A. Stockholders' equity can be described as creditorship claim on total assets.
B. The cost of an asset and its fair value are never the same.
C. The historical cost principle requires that when assets are acquired, they should be recorded at market price.
D. Stockholders' equity can be described as ownership claim on total assets.
E. The historical cost principle requires that when assets are acquired, they should be recorded at appraisal value.

Answer 1

d

Step-by-step explanation:

A stockholder is an investor that purchases shares in a company. A stockholder is regarded as the owner of the company.

According to accounting information :

Stockholders' equity = total assets - Total liabilities.

Stockholders' equity is the claim a shareholder has on a company's assets after total liabilities have been subtracted

The historical cost principle requires assets to be recorded at its historical cost regardless of changes in the value of the asset