Which of the Following Costs Generally Would Be Capitalized to a Property

question 20

Multiple Choice

Which of the following costs generally would be capitalized to a property, plant and equipment account?

• A) Interest on debt incurred to purchase the item
• B) Property taxes relating to periods after acquisition
• C) Import duties incurred on purchases
• D) freight-out

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Definitions:

Intra-Entity Transfer

Transactions of goods, services, or funds that occur between departments or divisions within the same company or organization.

Consolidation

The process of combining financial statements of a parent company with its subsidiaries to present as if the group of companies is a single economic entity.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for a long-term asset since its acquisition.

Consolidation Purposes

The process of combining the financial statements of a parent company and its subsidiaries into one comprehensive financial statement package, to present as if the group were a single entity.