No Ai thank u What is the correct accounting treatment for self-constructedfixed assets when idle time occurs during construction?a) Capitalize all overhead costs including idle timeb) Exclude abnormal idle time costs from capitalizationc) Capitalize idle time only if within budgetd) Add idle time costs to depreciation

Explanation of Capitalization:Capitalization is the process of recording expenses as part of an…

Answered: What is the correct accounting…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4MC: Which of the following statements about capitalizing costs is correct? A. Capitalizing costs refers...

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Which of the following statements about capitalizing costs is correct? A. Capitalizing costs refers to the process of converting assets to expenses. B. Only the purchase price of the asset is capitalized. C. Capitalizing a cost means to record it as an asset. D. Capitalizing costs results in an immediate decrease in net income.
Which of the following accounts would not be included in the Acquisition and Payment for Long-Lived Assets Cycle? a. Revenue b. Depreciation expense c. Gain on disposal d. Equipment
What is a relevant cost? Explain why depreciation on an existing asset is always irrelevant.
What is the correct accounting treatment for...
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Which of the following expenditures would be included in the cost of a fixed asset? Oa. Sales taxes Ob. Vandalism Oc. Uninsured theft Od. Mistakes in installation
The general rule in the accounting treatment of research and development costs is A. Capitalize all costs as assets when incurred and amortized when revenue is earned. B. Treat all costs as current expenses as incurred. C. Capitalize selectively, and predetermine the conditions that would require capitalization as well as those that would be written off as current expenses. D. Accumulate all costs in a special intangible asset account until a determination can be made as to the degree of future benefits.
Losses on discarding fixed assets are _____. a. opportunity costs b. nonoperating items c. capital expenditures d. accumulated depreciation
What is the purpose of charging depreciation in financial statements? A To allocate the cost of a non-current asset over the accounting periods expected to benefit from its use B To ensure that funds are available for the eventual replacement of the asset C To reduce the cost of the asset in the statement of financial position to its estimated market value D To account for the ‘wearing-out’ of the asset over its life
Depreciation expense under the invenroty system is a. Based on cost minus residual value b. Basically a FIFO approach to depreciable asset accounting c. The result of applying a depreciation rate to the original cost d. A measure of the change in the value of the depreciable asset
In practice, would you expect the depreciation expense for a non-current asset to be overestimated or underestimated? Explain why this is the case.
Which statement about depreciation is false?a. A major objective of depreciation accounting is to allocate the cost of using an assetagainst the revenues it helps to generate.b. Depreciation should not be recorded in years in which the market value of the asset hasincreased.c. Obsolescence as well as physical wear and tear should be considered when determiningthe period over which an asset should be depreciated.d. Depreciation is a process of allocating the cost of an asset to expense over its usefullife.

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