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Which of the following Expenses will not be included in the acquisition of plant?
- a)Purchase Price of Plant
- b)Installation Expenses
- c)Annual Maintenance charges
- d)Delivery charges of the plant.
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
Which of the following Expenses will not be included in the acquisitio...
Answer:
Acquisition of Plant:
Acquisition of plant refers to the process of purchasing and installing new machinery, equipment, or any other fixed assets that are used in the production process of a business.
Expenses included in the Acquisition of Plant:
The following expenses are included in the acquisition of plant:
a) Purchase price of Plant:
The cost of the plant, which includes the purchase price, taxes, and any other fees related to the purchase.
b) Installation Expenses:
The cost of installing the plant, including labor, materials, and any other expenses related to the installation.
d) Delivery charges of the plant:
The cost of transporting the plant from the seller's location to the buyer's location.
Expenses not included in Acquisition of Plant:
c) Annual Maintenance charges:
The cost of maintaining the plant, which includes repair and maintenance expenses, is not included in the acquisition of plant. These expenses are considered operating expenses and are charged to the income statement as and when they are incurred.
Conclusion:
In conclusion, the cost of acquiring a plant includes the purchase price of the plant, installation expenses, and delivery charges of the plant. However, maintenance charges that are incurred annually are not included in the acquisition cost of the plant.
Acquisition of Plant:
Acquisition of plant refers to the process of purchasing and installing new machinery, equipment, or any other fixed assets that are used in the production process of a business.
Expenses included in the Acquisition of Plant:
The following expenses are included in the acquisition of plant:
a) Purchase price of Plant:
The cost of the plant, which includes the purchase price, taxes, and any other fees related to the purchase.
b) Installation Expenses:
The cost of installing the plant, including labor, materials, and any other expenses related to the installation.
d) Delivery charges of the plant:
The cost of transporting the plant from the seller's location to the buyer's location.
Expenses not included in Acquisition of Plant:
c) Annual Maintenance charges:
The cost of maintaining the plant, which includes repair and maintenance expenses, is not included in the acquisition of plant. These expenses are considered operating expenses and are charged to the income statement as and when they are incurred.
Conclusion:
In conclusion, the cost of acquiring a plant includes the purchase price of the plant, installation expenses, and delivery charges of the plant. However, maintenance charges that are incurred annually are not included in the acquisition cost of the plant.
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Community Answer
Which of the following Expenses will not be included in the acquisitio...
Annual maintenance charges are of recurring in nature they will not be added to machinery .
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Which of the following Expenses will not be included in the acquisition of plant?a)Purchase Price of Plantb)Installation Expensesc)Annual Maintenance chargesd)Delivery charges of the plant.Correct answer is option 'C'. Can you explain this answer?
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