ACC 304 All Assignments ACC 304 All Assignments | Page 144

35. 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.
36. The period of time during which interest must be capitalized
ends when
a. the asset is substantially complete and ready for its intended use.
b. no further interest cost is being incurred.