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. According to GAAP, interest cost incurred to finance construction of an asset must be capitalized...

. According to GAAP, interest cost incurred to finance construction of an asset must be capitalized in which of the following situations? a. when the asset is inventory that is routinely manufactured in large quantities on a repetitive basis b. when an asset is used in other than the earning activities of the firm c. when an asset is ready for its intended use d. when an asset is being constructed for a firm's own use

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Answer #1

Option C is the answer

Generally ,interest cost on finance used foe asset purchase is treated as expense and not capitalized unless the asset purchased is used for the firm's own purpose. Then in that case interest cost is added to cost of asset i.e capitalized
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