Which of the following statement is incorrect as to acquisition of Property, Plant and Equipment on a cash basis?. a. The cost of an item of property, plant and equipment is the cash price equivalent at the recognition date. b. Directly attributable cost to be capitalized includes freight, installation cost and other cost necessary in bringing the asset to the location and condition for the intended use. c. The cost of asset acquired on a cash basis simply includes the cash paid plus directly attributable cost d. When several assets are acquired at a “basket price” or “lump sum price”, it is necessary to apportion the single price to the assets acquired on the basis of relative carrying value.
Which of the following statement is incorrect as to acquisition of Property, Plant and Equipment on a cash basis?. a. The cost of an item of property, plant and equipment is the cash price equivalent at the recognition date. b. Directly attributable cost to be capitalized includes freight, installation cost and other cost necessary in bringing the asset to the location and condition for the intended use. c. The cost of asset acquired on a cash basis simply includes the cash paid plus directly attributable cost d. When several assets are acquired at a “basket price” or “lump sum price”, it is necessary to apportion the single price to the assets acquired on the basis of relative carrying value.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Which of the following statement is incorrect as to acquisition of Property, Plant and Equipment on a cash basis?.
a. The cost of an item of property, plant and equipment is the cash price equivalent at the recognition date.
b. Directly attributable cost to be capitalized includes freight, installation cost and other cost necessary in bringing the asset to the location and condition for the intended use.
c. The cost of asset acquired on a cash basis simply includes the cash paid plus directly attributable cost
d. When several assets are acquired at a “basket price” or “lump sum price”, it is necessary to apportion the single price to the assets acquired on the basis of relative carrying value.
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