Question

3. Equipment delivered on 1 January 2010 is paid for R1 500 000 on 31 December 2011. This is longer than normal credit terms. The cost at which the equipment is initially recognised ounts to R1.500.000. True/False?​

Answer 1

true

Step-by-step explanation:

The fact that the payment was made on 31 December 2011, which is more than a year after the delivery date of 1 January 2010, indicates that this is longer than normal credit terms. However, the cost at which the equipment is initially recognized is still R1.500.000, which is the initial value of the equipment and is not affected by the payment terms.