Question

All amounts paid to acquire a long-lived asset and to get it ready for its intended use are referred to as:

a) salvage value
b) net book value
c) the cost of an asset
d) immediate expenses

Answer 1

The term for all amounts paid to acquire a long-lived asset and prepare it for use is called 'the cost of an asset'. It includes purchase price and necessary costs but not the salvage value or net book value, which are calculated differently.

Step-by-step explanation:

All amounts paid to acquire a long-lived asset and to get it ready for its intended use are referred to as the cost of an asset. This includes the purchase price and all other costs necessary to bring the asset to a condition and location suitable for its intended use, such as delivery fees, installation charges, and testing fees. It does not include the salvage value, which is an estimate of an asset's value at the end of its useful life, or the net book value, which is the cost of an asset minus accumulated depreciation. Immediate expenses typically refer to short-term costs that are not capitalized as part of an asset's cost.