The cost of property acquired by direct cash purchase includes the cash paid and: A. the implied interest on the debt to finance the purchase. B. the market value of any noncash asset surrendered to acquire the asset. C. the estimated residual value of the asset. D. directly attributable costs of bringing the asset to working condition for its intended use.

The cost of property acquired by direct cash purchase includes the cash paid and: A. the implied interest on the debt to finance the purchase. B. the market value of any noncash asset surrendered to acquire the asset. C. the estimated residual value of the asset. D. directly attributable costs of bringing the asset to working condition for its intended use.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 7MC: Depreciation of a plant asset is the process of ________. A. asset valuation for statement of...

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Depreciation of a plant asset is the process of ________. A. asset valuation for statement of financial position purposes B. allocation of the assets cost to the periods of use C. fund accumulation for the replacement of the asset D. asset valuation based on current replacement cost data
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What amounts should be recorded as a cost of a long-term asset?
which of the following statements in relation to the cost of the asset is true? A. all of the statements are true B. The cost includes cash equivalent paid C. The cost includes the fair value of any non monetary consideration given to acquire an asset D. The cost includes nonrefundable purchase taxes
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Tangible assets are first recorded at: Multiple Choice cost minus residual (or salvage) value. the amount of cash paid for them. current market value or resale value. all costs to acquire them and prepare them for use.
Which statements are correct concerning measurement of cost of property, plant and equipment?I. The purchase price of an item of property, plant and equipment is the cash price equivalent at the date of recognitionII. If payment is deferred beyond normal credit terms, the difference between the cash price equivalent and total payment is recognized as interest expense over the life of the asset.III. If an item of property, plant and equipment is acquired in exchange for a nonmonetary asset or a combination of monetary and nonmonetary asset, the cost of such item is measured at fair value unless the exchange transaction lacks commercial substance or fair value of either asset received or given up is not reliably determinable.IV. If an entity is able to determine reliably the fair value of both the asset given up and asset received in an exchange, the fair value of the asset given up is used to measure the cost of asset received in exchange.
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Demonstrates the difference between depreciation costs as expenses and the cash flow generated by the purchase of a fixed asset? Give an example?
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
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