Property taxes accrued up to the date of the purchase of a capital asset should be included in the recorded cost of the asset.

Question

Quizplus · Accepted Answer

Property taxes accrued up to the date of the purchase of a capital asset form a part of the cost of the asset and should be included in the recorded cost of the asset. This is because these taxes are related to the purchase of the asset and are incurred to make the asset capable of generating future economic benefits. Hence, they should be capitalized and added to the cost of the asset.

Property Taxes Accrued Up to the Date of the Purchase