Interest may be included in the acquisition cost of property, plant, and equipment
A)during the construction period of a building.
B)if equipment is purchased on credit.
C)if acquisition of an existing plant is financed by a mortgage.
D)under no circumstances.

Question

Quizplus · Accepted Answer

Interest can be capitalized as part of the acquisition cost of property, plant, and equipment during the construction period of a building, as it is considered a necessary cost to bring the asset to its intended use.

Interest May Be Included in the Acquisition Cost of Property