Plant Assets

Which of the following is not an attribute of a plant asset?

• They are long-term

• The allocation of a plant asset's cost over its useful life is call amortization

• The life cycle ends with its disposal

• It is recorded at historical cost

The actual cost of a plant asset is only the purchase price.

• True

• False

The cost of land does not include which of the following?

• Cost of clearing the land

• Title transfer fees

• Delinquent property taxes

• Fencing

When an asset account increases the company has capitalized an acquired asset.

• True

• False

Which asset does not depreciate?

• Land

• Building

• Equipment

• Land Improvements

The cost of furniture and fixtures includes all the costs incurred to make the asset ready for its intended use.

• True

• False

The cost of machinery and equipment includes maintenance costs.

• True

• False

What is the definition of a capital expenditure?

• expenses incurred to maintain the asset in working order

• costs that increase the asset's capacity, efficiency, or extends its useful life