Question

Which if the following would be debited to the equipment account
A. Repairs and maintenance
B. In-transit insurance costs
C. Training employees to use the equipment
D. Insurance to cover the use of the machine

Answer 1

i think the answer is a

Answer 2

Answer:

The correct Choice is: B. In-transit insurance costs

Explanation:

The cost of machinery and equipment includes: • Purchase price (less any discounts) • Transportation (delivery) charges • Insurance while in transit • Sales and other taxes • Purchase commission • Installation costs • Cost of testing the asset before it is used After the asset is up and running, the company no longer debits insurance, taxes, and maintenance costs to the Equipment account. From that point on, insurance, taxes, repairs, and maintenance costs are recorded as expenses. (Financial Accounting, Kemp).