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Cost Principle, Lump-sum Purchases, Plant Assets & Acquisitions

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How is the cost principle applied to plant assets, acquisitions, including lump-sum purchases?

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Solution Summary

Your response is 218 words and discusses how to find the cost of plant assets, acquisitions and lump sum purchases.

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Historical cost principle says that the cost is the cash equivalent price paid in exchange for goods or services. So, for all these, you need to find out the "price paid" = cost!

Plant Asset:

All of the costs to get the asset "ready for use" are included in the cost of the asset. So, insurance on inbound ...

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Carol Sargent, PhD
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  • MSc, University of Virginia
  • PhD, Georgia State University
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