A company purchased new computer equipment from a local vendor. An employee offered to pick up the equipment and received a speeding ticket on his way back to the office. The cost of the speeding ticket should be charged to the cost of the equipment.

Question

Quizplus · Accepted Answer

The cost of the speeding ticket is not directly related to the acquisition cost of the equipment but is considered an incidental expense resulting from the employee's personal decision to speed, thus it should not be capitalized as part of the equipment's cost.

A Company Purchased New Computer Equipment from a Local Vendor