What principle states that companies should record assets at their acquisition cost?

The principle that states that companies should record assets at their acquisition cost is known as the historical cost principle. This principle emphasizes that when an asset is acquired, it should be recorded in the financial statements at the amount paid to acquire it, which includes all costs necessary to get the asset ready for its intended use. This means that the recorded cost reflects the actual transaction price at the time of acquisition, providing consistency and reliability in financial reporting.

The historical cost principle is important because it establishes an objective measure that is verifiable and not subject to subjective interpretations about an asset's value, which can fluctuate over time. By using the historical cost as the basis for asset valuation, stakeholders can confidently assess the company's financial position without having to guess the current market value of its assets.

Other principles listed, such as the matching principle, focus on the timing of expenses in relation to revenues, while the revenue recognition principle governs the timing of revenue recognition. The cost-benefit principle involves considerations about the costs of providing information versus the benefits derived from it, but none of these principles directly address asset valuation in the way that the historical cost principle does.