Kinds of costs are included when an asset is purchased and impact on the financial statements.

May 5th, 2015
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What kinds of costs are included when an asset is purchased. This requires an understanding terms and how they impact the financial statements as well as payment discount term?

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Question :Understand what kinds of costs are included when an asset is purchased. This requires an understanding of shipping terms and how they impact the financial statements as well as payment discount terms?Answer: Manufacturers and wholesalers normally sell their products to merchandisers on account. The credit terms are stated in the sellers bill or invoice. One common example of credit terms is net 30 days, or n/30, meaning full payment is due in 30 days.Frequently sellers offer their customers a small discount to encourage earlier payment. Perhaps the most credit terms offered by manufacturers and wholesalers are 2/10, n/30. This expression means that full payment is due in 30 days, but that the buyer may take 2 percent discount if payment is made within 10 days. The period during which the discount is available is termed the discount period and discount is

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