Acquisition Costs Includes All Costs Necessary to Get an Asset

question 16

Short Answer

Acquisition costs includes all costs necessary to get an asset ready for its _________________________.

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Definitions:

Gross Method

An accounting method for recording purchases at the full invoice price without deducting any cash discounts.

Recording

The act of documenting financial transactions in accounting records.

Estimated Bad Debts

A provision for accounts receivable that are expected not to be collected, thereby adjusting the value of gross receivables to a more realistic figure.

Uncollectible Account

An account receivable that a company deems unlikely to be collected and thus writes off as a bad debt expense.