Which of the following statements is true regarding the complex nature of inventory accounting in the land development and home building industry?
A) Common costs, such as capitalized interest, often require complex calculations.
B) The size and type of units to which costs must be allocated for a single parcel of land may vary considerably.
C) Costs associated with zoning applications and legal fees may occur in periods prior to the land acquisition.
D) All of the above are true.

Question

Quizplus · Accepted Answer

All three statements are true regarding the complex nature of inventory accounting in the land development and home building industry. Common costs like capitalized interest may require complex calculations. The size and type of units to which costs must be allocated for a single parcel of land may vary considerably, which makes the accounting process more challenging. Additionally, costs associated with zoning applications and legal fees may occur in periods prior to the actual land acquisition, which makes tracking and allocating those costs even more complex.

Which of the Following Statements Is True Regarding the Complex