The amount recorded as the cost of a long-term asset includes all costs reasonable and necessary for putting the asset in a working condition.

Question

Quizplus · Accepted Answer

The cost of a long-term asset includes not only its purchase price, but also all costs directly related to getting it ready for use, such as installation, testing, and freight. This is known as the asset's cost basis or book value.

The Amount Recorded as the Cost of a Long-Term Asset