Which of the following statements about interest costs is correct?
A)interest on money specifically borrowed to finance construction of an asset should be capitalized
B)a proportionate share of all interest incurred during the life of an asset should be capitalized
C)interest cost incurred during construction of an asset can be capitalized
D)no interest should be capitalized

Question

Quizplus · Accepted Answer

According to accounting standards, interest cost incurred during the construction of an asset can be capitalized. This means that the interest expense can be added to the asset's cost and depreciated over its useful life. However, interest on money borrowed for other purposes should not be capitalized.

Which of the Following Statements About Interest Costs Is Correct