Cost added to a taxpayer's books should not include which of the following?

Cost added to a taxpayer's books should not include which of the following?

• A. Asset improvements
• B. Depreciation costs
• C. Repairs
• D. Accrued liabilities

Answer: (C)

In accounting for personal property, the cost added to a taxpayer's books typically reflects expenditures that enhance the value or extend the useful life of an asset. This generally includes asset improvements and accrued liabilities, as they either increase the asset's value or represent financial obligations associated with the property. Repairs, on the other hand, are understood as costs incurred to maintain an asset in its current condition, rather than to improve it. Repairs do not add value or extend the useful life of the asset; instead, they simply restore the asset to a functioning state. Therefore, under standard accounting principles, repairs are treated as an expense in the period incurred, rather than as a capital addition to the taxpayer's books. Depreciation costs are similarly not added to the cost basis of assets, as they represent the allocation of the asset's cost over its useful life rather than a cash outlay or enhancement. Thus, the proper categorization dictates that repairs should not be included in the capitalized costs recorded on a taxpayer's books.

In accounting for personal property, the cost added to a taxpayer's books typically reflects expenditures that enhance the value or extend the useful life of an asset. This generally includes asset improvements and accrued liabilities, as they either increase the asset's value or represent financial obligations associated with the property.

Repairs, on the other hand, are understood as costs incurred to maintain an asset in its current condition, rather than to improve it. Repairs do not add value or extend the useful life of the asset; instead, they simply restore the asset to a functioning state. Therefore, under standard accounting principles, repairs are treated as an expense in the period incurred, rather than as a capital addition to the taxpayer's books.

Depreciation costs are similarly not added to the cost basis of assets, as they represent the allocation of the asset's cost over its useful life rather than a cash outlay or enhancement. Thus, the proper categorization dictates that repairs should not be included in the capitalized costs recorded on a taxpayer's books.