For each transaction numbered 1 through 6 below, identify which accounting treatment-capitalized or expensed-should be used to properly account for the transactions.You may use each letter more than once or not at all.
-Freight costs on production equipment in transit
A) Expensed immediately
B) Capitalized as part of the cost of the new asset

Question

Quizplus · Accepted Answer

Freight costs on production equipment in transit are capitalized as part of the cost of the new asset because they are necessary expenses to bring the asset to its intended use.

For Each Transaction Numbered 1 Through 6 Below, Identify Which