A lump-sum purchase of assets:
A) requires the company to record the assets bought as a single asset.
B) requires the company to divided the total cost among the various assets according to their historical cost.
C) uses the market values of the assets to determine the cost of each individual asset.
D) is also known as the group purchase of assets.

Question

Quizplus · Accepted Answer

In a lump-sum purchase, the total cost is allocated among the individual assets based on their relative market values, not historical costs.

A Lump-Sum Purchase of Assets