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Question

The installation expenses for a new machinery will be debited to __________________.

A
Installation Expenses Account
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B
Cash Account
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C
Machinery Account
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D
Profit and Loss Account
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Solution

The correct option is B Machinery Account

The installation expenses for a new machinery will be debited to machinery account.

All the incidental expenses incurred in reference to an asset till the asset is ready for put to use are treated part of the asset cost and to be debited to the respective asset account.


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