In dealing with capitalized costs, what should be done when deferred charges of interest exist on the balance sheet?
A) Assume them as accurately capitalized
B) Consider them candidates for fraud
C) Accept management's explanation if it seems reasonable
D) Nothing should be done, as they are perfectly normal on the balance sheet

Question

Quizplus · Accepted Answer

Deferred charges of interest on the balance sheet can sometimes be used to manipulate financial statements, so they should be scrutinized as potential indicators of fraud.

In Dealing with Capitalized Costs, What Should Be Done When