Reference no: EM132698766
Question 1. All of the following are directly attributable costs in the acquisition or construction of an item of PPE except
a. Costs of employee benefits arising directly from the construction or acquisition of PPE
b. Costs of site preparation
c. Broker's commission
d. Cost of staff training
Question 2. All of the following are expensed outright and do not form part of the cost of an item of PPE except
a. Installation and assembly costs after the asset is in the location and condition intended by management.
b. Professional fees incurred in the training of staff who will be operating the machinery acquired.
c. Administration and other general overhead costs.
d. Insurance costs while a purchased equipment is in-transit.
Question 3. Which of the following is included in the initial cost of an item of PPE?
a. Trade discounts
b. Cash discounts not taken
c. Present value of the estimates of decommissioning and restoration costs
d. Refundable purchase taxes
Question 4. According to the GAM for NGAs, the costs incurred during the construction of an asset are
a. expensed in the period incurred.
b. capitalized in the building account or other account.
c. capitalized in a construction in progress account.
d. initially recorded in the registries and recorded in the journals only when the construction is done and the asset is turned over and accepted by the government entity.