Notes Chapter 9

Notes Chapter 9 - b.i Cost principle record plant assets at...

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Notes Chapter 9 I. Plant Assets a. Plant assets- resources that have physical substance (a definite size and shape) ; are used in the operations of a business; are not intended for sale to customers. a.i. Aka: property, plant, and equipment; fixed assets a.ii. Decline in value over their useful lives. a.iii. It is important for a company to a.iii.1. Keep assets in good operating condition a.iii.2. Replace worn-out or outdated assets a.iii.3. Expand its productive assets as needed b. Determining the Cost of Plant Assets
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Unformatted text preview: b.i. Cost principle- record plant assets at cost. b.ii. Cost consists of all expenditures necessary to require an asset and make it ready for its intended use (i.e. purchase price, freight costs, installation costs…) b.iii. Revenue expenditures- a cost not included int a plant assets account that must be expensed immediately b.iv. Capital Expenditures- costs that are not expensed immediately but are included in a plant asset account...
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