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18 January, 06:30

When can interest be included in the acquisition cost of a plant asset?

A : during the construction period of a self-constructed asset

B : when the asset is purchased on credit

C : when the asset acquisition is financed by a long-term note payable

D : when it is a part of a lump-sum purchase

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Answers (1)
  1. 18 January, 06:56
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    a. during the the construction period of a self-constructed asset

    Explanation:

    "Determining the cost of constructing a new building is often more difficult. Usually this cost includes architect's fees; building permits; payments to contractors; and the cost of digging the foundation. Also included are labor and materials to build the building; salaries of officers supervising the construction; and insurance, taxes, and interest during the construction period."

    Reference: Porter, Debbie, and Tidewater Community College. "Principles of Accounting I." Lumen, 2019,
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