PRC-1 · Chapter 6 · Question 4 of 100
Which of the following costs should be EXCLUDED from the initial capitalized cost of a newly acquired machine?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Costs of training staff to operate the new machine.
Explanation
Staff training costs cannot be capitalized as part of the asset's cost because the business does not control the staff or guarantee future economic benefits from them. These costs must be expensed immediately.
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