BU127 Chapter Notes - Chapter 9: Book Value, European Cooperation In Science And Technology, Historical Cost
3149201811 and 39370 others unlocked
6
BU127 Full Course Notes
Verified Note
6 documents
Document Summary
Acquisition & maintenance of property plant & equipment (ppe) Tangible or intangible resources owned by a business and used to produce over several years. Acquired for use on a continuing basis. Cost principle: all costs incurred in acquiring an asset are recorded in an asset account. Capitalized costs: recorded as assets no expenses: sale tax, legal fees, transportation. Capitalized costs are added to the purchase price of the assets. Dr assets cr payable or dr assets cr cash cr payables. Dr assets cr shares or dr assets cr cash cr shares. Dr building cr cash (all interests while construction is uncompleted) A factory is acquired with equipment, building and the land in which it is built. Dr land dr building dr equipment cr cash. Expenditures made after the asset is acquired. Revenue expenditures: ordinary repairs to maintain productive capacity. Extraordinary repairs and betterments: increase productivity or lifespan. Expenditures recorded as increase in assets not expenses.