Evaluate the following statements: S1. The borrowing cost is capitalized when the entity undertakes activities that are necessary to prepare the asset for the intended use or sale. S2. Borrowing cost incurred while land acquired for building purposes is held without any associated development activity does not qualify for capitalization.
Evaluate the following statements: S1. The borrowing cost is capitalized when the entity undertakes activities that are necessary to prepare the asset for the intended use or sale. S2. Borrowing cost incurred while land acquired for building purposes is held without any associated development activity does not qualify for capitalization.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Evaluate the following statements:
S1. The borrowing cost is capitalized when the entity undertakes activities that are necessary to prepare the asset for the intended use or sale.
S2. Borrowing cost incurred while land acquired for building purposes is held without any associated development activity does not qualify for capitalization.
S1. The borrowing cost is capitalized when the entity undertakes activities that are necessary to prepare the asset for the intended use or sale.
S2. Borrowing cost incurred while land acquired for building purposes is held without any associated development activity does not qualify for capitalization.
a.False, False
b.True, True
c.False, True
d.True, False
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