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.
-Sales tax on equipment purchase
A) Expensed immediately
B) Capitalized as part of the cost of the new asset

Question

Quizplus · Accepted Answer

Sales tax on equipment purchase is capitalized as part of the cost of the new asset because it is a necessary and direct cost associated with acquiring the asset and preparing it for its intended use.

For Each Transaction Numbered 1 Through 6 Below, Identify Which