Which of the Following Should Be Included in the Acquisition

question 50

Multiple Choice

Which of the following should be included in the acquisition cost of a piece of equipment?

• A) Transportation costs
• B) Installation costs
• C) Testing costs prior to placing the equipment into production
• D) All of the above

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Definitions:

Ending Inventory

The worth of products ready for sale at the close of a financial period, determined by adding acquisitions to the initial stock and then deducting the expense of the goods that were sold.

FOB Shipping Point

A term indicating that the buyer takes responsibility for goods and their transportation costs once they leave the seller's premises.

Net Income

The final amount a company earns, following the deduction of all expenditures and taxes from its total revenue.

Ending Inventory

The cost of inventory on hand for selling at the conclusion of an accounting cycle.