When a capital asset (such as land or buildings) is purchased, any unpaid property taxes (for the period prior to the purchase date) that are paid by the purchaser should be recorded as part of the cost of the asset.

Question

Quizplus · Accepted Answer

This is because property taxes are considered to be part of the cost of acquiring and preparing a capital asset for its intended use. Therefore, any property taxes paid by the purchaser prior to the purchase date should be added to the cost of the asset.

When a Capital Asset (Such as Land or Buildings) Is