Mattox Company Is Building a New Plant That Will Take

question 156

Multiple Choice

Mattox Company is building a new plant that will take three years to construct. The construction will be financed in part by funds borrowed during the construction period. There are significant architect fees excavation fees and building permit fees. Which of the following statements is true?

• A) Excavation fees are capitalized but building permit fees are not.
• B) Architect fees are capitalized but building permit fees are not.
• C) Interest is capitalized during the construction as part of the cost of the building.
• D) The capitalized cost is equal to the contract price to build the plant less any interest on borrowed funds.

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Definitions:

Rigidity

The lack of flexibility or adaptability in thinking, systems, or physical objects.

Discipline

The practice of training oneself or others to obey rules or norms by using a system of rewards and punishments.

Crisis

A significant threat to operations or resources, requiring urgent attention and decision-making to mitigate its effects.

Administrative Details

The routine, often clerical work that supports the operation of an organization, such as filing, scheduling, or managing records.