Which of following best demonstrates the application of the cost principle?

A company reports trading and investment securities at their market cost.

A building purchased last year for $1 million is currently worth $1.2 million, but the company still reports the building at $1 million.

A building purchased last year for $1 million is currently worth $1.2 million, and the company adjusts the records to reflect the current value.

A company reports assets at either historical or fair value, depending which is closer to market value.