In computing capitalized interest, average accumulated expenditures:
A) Is the arithmetic mean of all construction expenditures.
B) Is determined by time-weighting individual expenditures made during the asset construction period.
C) Is multiplied by the company's most recent financing rates.
D) All of these answer choices are correct.

Question

Quizplus · Accepted Answer

Average accumulated expenditures are determined by time-weighting individual expenditures made during the asset construction period. This means that expenditures made earlier in the construction period are given less weight than those made later. This method more accurately reflects the actual cost of financing the asset during construction.

In Computing Capitalized Interest, Average Accumulated Expenditures