The capitalization of interest cost during construction:
A)increases future net income.
B)decreases future depreciation expense.
C)increases net income during construction phase.
D)decreases assets during construction phase.

Question

Quizplus · Accepted Answer

Capitalizing interest cost during construction increases net income during the construction phase by adding the interest cost to the cost of the asset, which is then depreciated over the asset's useful life.

The Capitalization of Interest Cost During Construction