Which of the Following Costs Should NOT Be Added to the Cost

question 68

Multiple Choice

Which of the following costs should NOT be added to the cost of the machine?

• A) The cost of transporting the machine to its setup location
• B) The cost of insurance for the machine while it is in-transit
• C) The cost of a special platform for the machine
• D) The cost of oiling the machine after it has been used for two years

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Definitions:

Goodwill

An intangible asset reflecting the excess value of a business above its net tangible assets, often arising from acquisitions.

Consolidated Balance Sheet

A financial statement showing the combined assets, liabilities, and equity of a parent company and its subsidiaries.

Acquisition Method

An accounting technique used to consolidate the financial statements of a parent company and its subsidiaries.

Monetary Assets

Assets that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.