Which of the following statement is incorrect as to acquisition of Property, Plant and Equipment on a cash basis? * When several assets are acquired at a "basket price" or "lump sum price", it is necessary to apportion the single price to the assets acquired on the basis of relative carrying value. O The cost of asset acquired on a cash basis simply includes the cash paid plus directiy attributable cost O The cost of an item of property, plant and equipment is the cash price equivalent at the recognition date. Directly attributable cost to be capitalized includes freight, installation cost and other cost necessary in bringing the asset to the location and condition for the intended use.
Which of the following statement is incorrect as to acquisition of Property, Plant and Equipment on a cash basis? * When several assets are acquired at a "basket price" or "lump sum price", it is necessary to apportion the single price to the assets acquired on the basis of relative carrying value. O The cost of asset acquired on a cash basis simply includes the cash paid plus directiy attributable cost O The cost of an item of property, plant and equipment is the cash price equivalent at the recognition date. Directly attributable cost to be capitalized includes freight, installation cost and other cost necessary in bringing the asset to the location and condition for the intended use.
Chapter13: Property Transactions: Determination Of Gain Or Loss, Basis Considerations, And Nonta Xable Exchanges
Section: Chapter Questions
Problem 4BCRQ
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