Central National Bank recently acquired a new computer system.Which of the following costs associated with the computer should not be debited to the Equipment account?
A) Installation of a backup power source required for the computer.
B) Replacement of several circuit boards damaged during installation.
C) System programmer wages for personnel hired to prepare the system for use.
D) Insurance coverage covering the transport period from the manufacturer.

Question

Quizplus · Accepted Answer

The replacement of several circuit boards damaged during installation is considered a repair expense and should be recorded as such, not as a cost of acquiring the equipment. The other options are all costs directly related to the acquisition and preparation of the new computer system and should be debited to the Equipment account.

Central National Bank Recently Acquired a New Computer System