The capital cost of an asset includes a number of costs. Indicate which cost would NOT be considered part of the capital cost.
A)Legal fees incurred to acquire the asset.
B)Duties paid on the asset.
C)Fire and theft insurance paid on the asset.
D)Non-refundable provincial sales taxes paid on the asset.
E)An appropriate allocation of overhead.

Question

Quizplus · Accepted Answer

Fire and theft insurance paid on the asset is considered an operating cost, not a capital cost. The other options, including legal fees, duties, provincial taxes, and overhead, are all part of the capital cost of the asset.

The Capital Cost of an Asset Includes a Number of Costs