According to GAAP, Interest Cost Incurred to Finance Construction of an Asset

question 67

Multiple Choice

According to GAAP, interest cost incurred to finance construction of an asset must be capitalized in which of the following situations?

• A)when the asset is inventory that is routinely manufactured in large quantities on a repetitive basis
• B)when an asset is used in other than the earning activities of the firm
• C)when an asset is ready for its intended use
• D)when an asset is being constructed for a firm's own use

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