Question

Which of the following expenses is NOT included in the acquisition cost of a plant and equipment?

• A. Cost of site preparation.
• B. Delivery and handling charges.
• C. Installation costs.
• D. Financing costs incurred subsequent to the period after plant and equipment is put to use.

Answer 1

The correct option is D Financing costs incurred subsequent to the period after plant and equipment is put to use.

The cost of equipment, vehicles, and furniture includes the purchase price, sales taxes, transportation fees, insurance paid to cover the item during shipment, assembly, installation, Delivery and handling charges and all other costs associated with making the item ready for use.