Answered: From the following identify the cost…

From the following identify the cost that is not a cost of PPE? Professional fees Nonrefundable taxes Testing the functionality of asset Value added tax

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4MC: Which of the following statements about capitalizing costs is correct? A. Capitalizing costs refers...

See similar textbooks

Related questions

Q: What costs should be capitalized for a self constructed asset?

Q: If the sale price executes at the price you specified, what would be the total loss, excluding…

A: Sales price when executed at the price specified will be equal to the breakeven price. Break even…

Q: Which of the following concepts is violated when measuring inventories at the lower of cost and net…

A: Solution: As per historical cost concept, in accounting value of an assets is recorded at original…

Q: For which of the following does IFRS for SMEs not provide a simplification of full IFRS?a.…

A: IFRS for SMEs: The majority of companies are non-traded company. These private companies are called…

Q: 2. Which of the following costs would most likely be a discretionary fixed cost? A. The rent of the…

A: The correct option is D that is, Advertising. Discretionary fixed costs are such costs which are…

Q: What are the differences between the cost and sales comparison approaches to appraising property?

A: If the cost approach is used, the appraiser set up an value for the location on which the…

Q: An investment property should be measured initially at O A. Cost. B. Cost less accumulated…

A: Investment property is a kind of asset that is part of the balance sheet of the company. It means…

Q: Choose the correct.For which of the following does IFRS for SMEs not provide a simplification of…

Q: From the following identify the cost that is not a cost of PPE? Professional fees Nonrefundable…

A: Property plant and machinery are the fixed assets of the company which helps in production process.…

Q: What is a modified accelerated cost recovery system(MACRS)? Speculate as to why this system is…

Q: What is site-value tax

A: The site value tax is charged on the land's or site's value. It considers only the land and does not…

Q: Which of the following expenditure is not capital expenditure for equipment? a. Assembly b. Testing…

A: Capital expenditure for a equipment are the cost associated with equipment until it is put to use.

Q: Present a mathematical solution in order to express that how depreciation can effect tax liability…

A: There are different types of Depreciation method. They are: 1) Straight Line Method 2) Declining…

Q: Which of the following types of interest cost incurred in connection with the purchase or…

A: The costs incurred to acquire an asset can be capitalised or expensed depending on the nature of…

Q: This cost is associated with the contracts and non-competes necessary to retain talents. Tax Shield…

A: A non-compete contract is a legally enforceable contract. It is a contract between the company and…

Q: Why FASB treat the spending on the search and development as expense why it can’t be treated as long…

A: Accounting Principles: Accounting principles are the regulations and criteria that businesses must…

Q: How can we deal with Salvage value and gains tax:?

A: Depreciation: The term depreciation refers to the fall in the monetary value of assets due to its…

Q: Salvage value is always deducted from the total capitalizable cost to get the depreciable cost. What…

A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: EBITDA can be calculated using following formula depreciation = EBITDA + ЕBIT ammortisation EAT…

A: EBITDA means earning before interest , tax , depreciation and amortization.

Q: Which of the following should be capitalized when a pieceof production equipment is acquired for a…

Q: Discuss, using practical example how revenue expenditure should not be capitalized?

A: SOLUTION- Thus, a revenue expenditure which increases the utility or productive capacity of an…

Q: . What is the definition of a fixed asset and which expenditures can be added to the capitalized…

A: Disclaimer: “Since you have asked multiple question, we will solve the first question for you. If…

Q: Depreciation is needed only for computing income taxes. True or false?

Q: is less Tax on Profit on Sale of Asset and less Operating Costs (revenue and expenses) or (other…

A: Capital Budgeting helps the company to check the viability of the project. It will help the company…

Q: A choice of different measurement models can be applied to investment property, namely: the fair…

A: Investment property is the property which is held by the company or by any business which has been…

Q: Investment property is most likely to:A. earn rent.B. be held for resale.C. be used in the…

A: An investment is an allocation of money in some financial securities, properties, etc. in the…

Q: 1. How do we decide whether to capitalize (record as an asset) or expense a particular cost? 2.…

A: ANSWER Cost: The cost of the long-lived assets refers to all the expenditures made in order to…

Q: Which of the following is not a fixed cost?a. Direct materialsb. Depreciationc. Lease charged.…

A: Fixed cost is the cost which will be borne by the company irrespective of the units produced.

Q: Under IFRS, how are investment properties subsequently measured? a) The cost…

A: International Accounting Standard 40 on Investment states that the investment property should be…

Q: Should the component costs be figured on abefore-tax or an after-tax basis?

A: In finance cost of capital is used to decide whether raising additional capital is required or not.…

Q: The generally accepted accounting principle that supports recording the value of a property at the…

A: Correct answer is option 'D' i.e. cost principle. Explanation: Under US GAAP As per cost principle…

Q: Which of the following expenditures cannot be included in R&D costs? a. indirect costs b.…

A: R & D: R & D means Research and Development which indicates as a process of obtaining new…

Q: What costs are included in determining the total cost of an asset? Why would a company include more…

A: Asset refers to the resources used by the company in order to run operations effectively and…

Q: It is the initial cost of acquiring an asset, plus sales tax, transportation and normal costs of…

A: Cost of the asset is the cost which has been paid by the company in order to buy the asset and on…

Q: The general rule in the accounting treatment of research and development costs is A. Capitalize…

A: This question deals with the IAS 38 "Intangible Asset". As per accounting standard, intangible asset…

Q: what is an example of value added taxes

A: Value-added tax (VAT) refers to the consumption tax which is imposed on a commodity once the value…

Q: Which of these is not typically a responsibility of a property manager? Maintenance programs O…

A: Property manager is the person who sees the day to day working of the real estate.The responsibility…

Q: What is meant by depreciation for the cost approach?

A: The cost of the property should not be more than the cost of acquiring and building the property.…

Q: Identify the economic resource that has the ability to give economic benefits. a. Expense b.…

A: Economic resources are those resources that provide benefits to the organization through generating…

Q: If a newly acquired asset is ‘held for sale’, the asset or disposal group will be measured at: A.…

A: Held for sale assets are those assets that are acquired for the purpose of sale in short period of…

Q: What are two advantages to basing the valuation of assets and liabilities on their historical cost?

Q: 4. Investment property is initially measured at cost, including transaction costs. Such cost…

A: The assets acquired by a business are recorded under different categories. The accounting treatment…

Q: What is the objective in identifying the costs of an asset?

A: Asset: It represents the tangible and intangible resources owned by the business for a particular…

Q: Which of the following is considered not a Capital expenditure? a. Training costs b. Delivery costs…

A: Lets understand the basics. As per IAS 16 "Property, plant and equipment", initial cost for PPE…

Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

From the following identify the cost that is not a cost of PPE?
Professional fees
Nonrefundable taxes
Testing the functionality of asset
Value added tax
Iump to

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The modified internal rate of return (MRR) test is designed to address a limitation associated withthe use of the internal rate of return (IRR). What is that limitation?a) Working capital requirementb) Income taxesc) Reinvestment rated) Depreciation expense
The possible answers for option D are:Cost of Goods SoldDepreciation ExpenseEarned RevenueIncome Tax ExpenseInsurance ExpenseInterest ExpenseSupplies ExpenseWage Expense
Which of the following costs is a nonlease component for the lessee? taxes maintenance insurance
Which of the following costs is a nonlease component for the lessee? Group of answer choices taxes maintenance insurance all of the above
Which of the following costs are capitalized when purchasing a piece of equipment? a. The invoiced price of the equipment b. Sales taxes c. All installation costs related to the equipment d. All of the above
The generally accepted accounting principle that supports recording the value of a property at the purchase price when the market value is higher is the: A. conservatism principle B. going concern principle C. monetary principle D. cost principle
Which of the following statements is/are FALSE: I. Following the acquisition of an item of property, plant and equipment, subsequent expenditure for this item that will extend the asset’s useful life and increase the asset’s capacity is capitalised. II. Investment property does not get depreciated, unless it is measured at cost. III. In the statement of comprehensive income, costs can be analysed according to function or nature. Costs analysed according to function are classified into the following categories: distribution & selling costs; administrative expenses; other operating expenses (or income). IV. Because of the prudence convention, inventories are expensed in the income statement as cost of goods sold when they are sold, and not when they are bought in by the business and paid for. V. A complete set of financial statements consists of the statement of financial position, the statement of comprehensive income, the statement of changes in equity and the statement of…
The general rule in the accounting treatment of research and development costs is A. Capitalize all costs as assets when incurred and amortized when revenue is earned. B. Treat all costs as current expenses as incurred. C. Capitalize selectively, and predetermine the conditions that would require capitalization as well as those that would be written off as current expenses. D. Accumulate all costs in a special intangible asset account until a determination can be made as to the degree of future benefits.
A capital expenditure would be: Group of answer choices added to the cost of the asset ignored subtracted from the cost of the asset an expense on the income statement
A right of use asset is initially measured at costs and subsequently measured using the A. Cost model B. Fair value model C. Revaluation model D. Any of these
explain the unique characteristics of the asset class, their associated risks and potential returns. Foreach asset class, you should use one or two examples to support your explanation. Asset Class Characteristics Risk Potential Returns ExampleCash Products Fixed Income Equities CurrenciesDerivatives
1. How do we decide whether to capitalize (record as an asset) or expense a particular cost? 2. Provide one example of each to capitalize (record as an asset) or expense a particular cost.