1)Each of the three categories of investments in debt and equity securities has similar accounting for all of the following transactions except

recognition of dividend and interest income

initial recording of cost

recognition of unrealized holding gains and losses

recognition of realized gains or losses on sales

2)Capitalized interest for a constructed asset cannot exceed actual interest costs.

True

False

3)Under the full-cost method, only the costs associated with the exploration that resulted in the successful discovery of oil and gas can be capitalized.

True

False

4)When a life insurance policy contains a guarantee that the company that purchased the policy is entitled to a return equal to the amount of the cash surrender value of the policy, a portion of the premium is recorded to a long term liability account.

True

False

5)U.S. GAAP allows a company to capitalize more of the costs of internally generated assets than allowed under IFRS.

True

False