When May a Company Include Interest Costs as Part of the Cost

question 146

Multiple Choice

When may a company include interest costs as part of the cost of the asset?

• A) When they are self-constructing a piece of equipment they will use to manufacture their products, but only during the period of construction.
• B) Interest is never allowed to be capitalized.
• C) When they must borrow money to finance the manufacture of their inventory items.
• D) When they buy a piece of equipment and finance its acquisition by a bank loan.

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