Acquisition cost
Financial Accounting glossary · The Accounting Cycle & Financial Statements
Definition
Total cost to bring an asset to its intended use, including purchase price, freight, installation, and direct preparation costs.
Acquisition cost in plain English
Acquisition cost is the TRUE full price of getting an asset ready to actually use — not just the sticker price, but every unavoidable cost of getting it in place and working. So it includes the purchase price plus things like shipping (freight), installation, and setup. If you buy a $1,000 industrial oven but pay $150 to ship it and $200 to have it wired in, your acquisition cost is $1,350, because none of it would work without all three. The logic: whatever you HAD to spend just to make the asset usable is genuinely part of what that asset cost you.
Learn these first
Related Financial Accounting terms
Financial Accounting practice questions · Financial Accounting flashcards · Financial Accounting study guide