Question

If a plant asset is purchased and the buyer incurs other acquisition costs such as transportation, if a quick payment discount is available, which costs are discounted?

Answer 1

Other acquisition costs, such as transportation, are also eligible for the quick payment discount on plant assets.

Step-by-step explanation:

When a plant asset is purchased and the buyer incurs other acquisition costs such as transportation, these additional costs are also eligible for the quick payment discount. This discount is applicable to the total amount of the purchase including the acquisition costs. For example, if a plant asset costs $1,000 and the transportation costs are $100, the quick payment discount would be applied to the total of $1,100.