Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Fundamental Accounting Equation

Financial Accounting

1. Introduction to Accounting

Fundamental Accounting Equation

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Multiple Choice

Which of the following costs are included in the capitalized cost of a tangible asset?

Employee training costs for using the asset

Advertising costs to promote the asset

Routine maintenance expenses after acquisition

Purchase price, installation costs, and legal fees related to acquisition

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Verified step by step guidance

Understand the concept of capitalized costs: Capitalized costs are expenditures that are included in the initial value of a tangible asset on the balance sheet. These costs are directly related to acquiring and preparing the asset for use.

Identify the types of costs that qualify for capitalization: Costs that are necessary to bring the asset to its intended use, such as purchase price, installation costs, and legal fees related to acquisition, are included in the capitalized cost.

Evaluate the costs provided in the problem: Employee training costs, advertising costs, and routine maintenance expenses after acquisition are not directly related to acquiring or preparing the asset for use. These are considered operating expenses and are expensed in the period incurred.

Focus on the correct answer: The purchase price, installation costs, and legal fees related to acquisition are directly tied to the acquisition and preparation of the asset, making them eligible for capitalization.

Summarize the reasoning: Only costs that are necessary to acquire and prepare the asset for its intended use are included in the capitalized cost. Other costs, such as training, advertising, and maintenance, are expensed as incurred.