Explain how the cost principle applies to recording the cost of property, plant, and equipment. - The

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Explain how the cost principle applies to recording the cost of property, plant, and equipment.

- The cost of an asset is any expenditure necessary to acquire the asset and to prepare the asset for use.

- This amount is generally the cash paid.

- If noncash consideration is involved, cost is the fair value of the asset received or the fair value of the asset given up or consideration issued, whichever is more clearly determinable.

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Cornerstones Of Financial Accounting

ISBN: 9780176707125

2nd Canadian Edition

Authors: Jay Rich, Jefferson Jones, Maryanne Mowen, Don Hansen, Donald Jones, Ralph Tassone

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