The cost of plant and equipment includes all expenditures reasonable and necessary in acquring the asset and placing it in a position and condition for use in the operations of the business. Only reasonable and necessary expenditures should be 【21】______ For example, if the company' truck driver receives a traffic ticket while hauling a new machine to the plant, the traffic 【22】______ is not part of the cost of the new machine. If the machine is dropped and 【23】______ while being uploaded, the cost of repairing the damage should be 【24】______ as expense in the current period and should not be added 【25】______ the cost of the machine. Cost is most easily determined 【26】______ an asset is purchased for cash. The cost of the as set is then 【27】______ to the cash outlay necessary in acquiring the asset 【28】______ any expenditure for freight, insurance while in transit, installation, trial runs, and any other 【29】______ necessary to make the asset ready for use. If plant assets are 【30】______ on the installment plan or by issuance of notes payable, the interest element or carrying charge should be 【31】______ as interest expense and not as part of the cost of the plant assets. Why should all the incidental charges 【32】______ to the acquisition of a machine 【33】______ included in its cost? Why 【34】______ treat these incidental charges as expenses of the period in which the machine is acquired? The answer is to be found in the basic accounting 【35】______ of matching costs and revenue. The benefits of 【36】______ the machine will be received over a span of years, 10 years, for example. During those 10 years the 【37】______ of the machine will contribute to revenue. 【38】______ , the total costs of the machine should be recorded in the accounts as a(n) 【39】______ and allocated against the revenue of the 10 years. All costs incurred in acquiring the machine are costs for services to be 【40】______ from using the machine. 【21】