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

Question

Huber

Business

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)

Know the Answer?

Mindy · Answer 1

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,

When can interest be included in the acquisition cost of a plant asset?A : during the construction period of a self-constructed assetB : when the asset is purchased on creditC : when the asset acquisition is financed by a long-term note payableD : when it is a part of a lump-sum purchase

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