Final answer:
The acquisition cost of property, plant, and equipment includes the purchase price and all necessary expenditures for its intended use, which is true. This accounting practice capitalizes these costs, spreading them over the asset's useful life for accurate financial reporting.
Step-by-step explanation:
The statement that the acquisition cost of property, plant, and equipment is the cash-equivalent purchase price plus all reasonable and necessary expenditures made to acquire and prepare the asset for its intended use is true. When a firm decides to buy new equipment or build a new facility, this involves not just the purchase price, but also additional costs such as installation fees, transportation charges, and legal expenses. These costs combined constitute the total acquisition cost and are capitalized as part of the asset's value on the company's balance sheet. This accounting practice ensures that the cost of the asset is spread over its useful life through depreciation, reflecting a more accurate picture of the company's financial situation. Business investments, particularly in new equipment and structures, are essential for economic growth and future profitability, as demonstrated by the significant investment made by U.S. firms, even during economic downturns.