Which of the following statements is true regarding capitalization of interest? A) The minimum amount of interest
Question:
A) The minimum amount of interest to be capitalized is determined by multiplying a weighted average interest rate by the amount of average accumulated expenditures on qualifying assets during the period
B) Interest cost capitalized in connection with the purchase of land to be used as a building site should be debited to the land account and not to the building account.
C) The amount of interest cost capitalized during the period should not exceed the actual interest cost incurred.
D) When excess borrowed funds not immediately needed for construction are temporarily invested, any interest earned should be offset against the interest cost incurred when determining the amount of interest cost to be capitalized.
Auditing a risk based approach to conducting a quality audit
ISBN: 978-1133939153
9th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg