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Match Each Transaction to Accounting Treatment—capitalized or Expensed—should Be Used

Question 107

Matching

Match each transaction to accounting treatment—capitalized or expensed—should be used to properly account for the transactions, You may use each choice more than once or not at all.

Premises:
Freight costs on production equipment in transit
Sales tax on equipment purchase
Damage during installation and repair costs
Interest paid on construction loan during the building period
Survey costs by contractor
Construction insurance to cover theft or vandalism during building construction
Responses:
Expensed immediately
Capitalized as part of the cost of the new asset

Correct Answer:

Freight costs on production equipment in transit
Sales tax on equipment purchase
Damage during installation and repair costs
Interest paid on construction loan during the building period
Survey costs by contractor
Construction insurance to cover theft or vandalism during building construction
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