Final answer:
c. Capitalized
The purchase price and related costs of getting an asset ready for use should be capitalized. This treatment allows costs to be allocated over the asset's useful life, providing a more accurate representation of its contribution to revenue over time.
Step-by-step explanation:
The purchase price and all costs to bring an asset to its desired condition and location for use should be capitalized. When an asset is purchased for the purpose of using it in the business, the costs associated with acquiring the asset and bringing it to a usable state are not expensed immediately. Instead, these costs are added to the value of the asset on the balance sheet and are expensed over time through depreciation or amortization, reflecting the asset's usage and wear and tear over its useful life.
Capitalization allows for a more accurate reflection of the asset's contribution to revenue generation over time, rather than distorting profit in the year of purchase. It's important to note that capitalization is different from expenses, which are costs that are consumed within the same period they are incurred and do not provide future economic benefits.