Interest Is Capitalized When Incurred in Connection with the Construction

question 28

Multiple Choice

Interest is capitalized when incurred in connection with the construction of plant assets because

• A)interest is considered a part of the acquisition cost of the related plant asset.
• B)the decision to purchase a plant asset is a business decision separate from the financing decision.
• C)many plant assets last longer than 20 years.
• D)interest is considered an expense of the period.

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