Under the cost principle:
A)only reasonable and necessary costs of acquiring an asset should be recorded as a cost of the asset.
B)costs of preparing an asset for use should never be recorded as part of the cost of the asset.
C)all reasonable and necessary costs of acquiring an asset and preparing it for use should be recorded as a cost of the asset.
D)only the actual purchase price of the asset is recorded as the cost of the asset.

Question

Quizplus · Accepted Answer

According to the cost principle, all reasonable and necessary costs of acquiring an asset and preparing it for use should be recorded as a cost of the asset. This includes purchase price, freight charges, installation expenses, and any other necessary costs incurred to get the asset ready for use. Therefore, choice C is the correct answer.

Under the Cost Principle