All amounts paid to acquire a plant asset and to get it ready for its intended use are referred to as:
A) set up costs.
B) expenditures.
C) maintenance expense.
D) the cost of an asset.

Question

Quizplus · Accepted Answer

The cost incurred to acquire a plant asset and to bring it to the condition in which it can be used for its intended purpose is known as the cost of the asset. This cost includes all the necessary expenditures incurred in acquiring the asset, such as purchase price, transportation costs, installation costs, and any other costs associated with bringing the asset to its usable condition. Therefore, option D is the correct choice. Option A, set up costs, typically refer to costs associated with setting up a production line or process. Option B, expenditures, is too broad of a term and could include expenses unrelated to acquiring a plant asset. Option C, maintenance expense, refers to the cost incurred to maintain an asset after it has been put into use.

All Amounts Paid to Acquire a Plant Asset and to Get