Plant assets purchased on long-term credit contracts should be accounted for at

Question

Quizplus · Accepted Answer

Plant assets purchased on long-term credit contracts should be accounted for at the present value of the future payments. This is because the present value provides a more accurate representation of the current value of the plant asset and the total cost of the purchase. Using the total value or the future amount of the future payments would not consider the time value of money, which is important in financial accounting.

Plant Assets Purchased on Long-Term Credit Contracts Should Be Accounted