Which of the Following Statements Is Correct Concerning Interest Expenditures

question 5

Multiple Choice

Which of the following statements is correct concerning interest expenditures incurred during the period of construction of capital projects?

• A) Interest expenditures may not be capitalized as part of the cost of general capital assets reported in governmental activities.
• B) Interest expenditures may be capitalized as part of the cost of general capital assets reported in the governmental activities accounts at the government-wide level.
• C) Interest expenditures must be capitalized as part of the cost of general capital assets reported in the capital projects fund.
• D) The capitalization of interest expenditures as part of the cost of general capital assets reported in the capital projects fund is optional.

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