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ACC202 Exam 4 student copy chapter 10 Spring 2012

ACC202 Exam 4 student copy chapter 10 Spring 2012 - ACC202...

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ACC202 Intermediate Accounting II Spring 2012 Exam 4, Chapter 10 30 multiple choice at one point each. Total 30 points Circle letter for answer on multiple choice. 1. To be consistent with the historical cost principle, overhead costs incurred by an enterprise constructing its own building should be a. allocated on the basis of lost production. b. eliminated completely from the cost of the asset. c. allocated on an opportunity cost basis. d. allocated on a pro rata basis between the asset and normal operations. 2. Which of the following costs are capitalized for self-constructed assets? 3. Which of the following assets do not qualify for capitalization of interest costs incurred during construction of the assets? 4. Assets that qualify for interest cost capitalization include 5. When computing the amount of interest cost to be capitalized, the concept of "avoidable interest" refers to a. the total interest cost actually incurred. b. a cost of capital charge for stockholders' equity. c. that portion of total interest cost which would not have been incurred if expenditures for asset construction had not been made. d. that portion of average accumulated expenditures on which no interest cost was incurred. 6. The period of time during which interest must be capitalized ends when 7. Which of the following statements is true regarding capitalization of interest?
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