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Interest costs can be capitalized on interest incurred during the period of construction on loans for self-constructed assets. interest incurred on notes payable used to
Interest costs can be capitalized on
- interest incurred during the period of construction on loans for self-constructed assets.
- interest incurred on notes payable used to purchase inventory for resale.
- interest incurred on installment loans secured by assets currently used in operations.
- none of these choices; interest charges must always be expensed.
Companies record depreciation on equipment to
- bring the asset's book value to its fair market value.
- allocate its cost to expense over its useful life.
- recognize gains in its fair market value.
The cost of land should be
- expensed in the period of purchase.
- capitalized as a depreciable asset.
- capitalized as a nondepreciable asset.
- included in the cost of the associated building.
Which of the following expenditures subsequent to asset acquisition may be capitalized?
- a routine repair
- a major overhaul that preserves the asset's intended useful life and purpose
- a major overhaul that improves productivity and extends the asset's useful life
- none of these choices; all of these expenditures must be expensed in the period incurred
A company replaces a costly machine part that restores some of the service potentials of the asset that had previously been depreciated. The journal entry to record this expenditure includes a debit to
- Repairs Expense.
- Accumulated Depreciation.
- Overhead.
- Equipment Expense
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