Cost concept

The cost principle  requires accountants to record an asset, liability, or equity at original acquisition cost. It is one of the most common accounting methods used to record transactions for newly purchased items.
However, it should be noted that an important issue in the concept of cost is the fact that the “value” of assets changes over time and when a company wants to liquidate, it is almost impossible to record the market value of the company’s assets company at that time.
However, the concept of cost recognizes that objects or assets are depreciated. Therefore, the amount of depreciation is removed from the original cost to show the value as a net amount.
The concept of cost  can not be used for financial investments and is most effective when used to  determine assets and liabilities  to  short term.
Accounting can be a very exciting academic discipline mainly due to its  diversity of concepts and terms. Aspiring accountants will never get bored if they develop their skills and keep up with the latest advancements and use small business accounting software to work more efficiently.