ACC 304 All Assignments ACC 304 All Assignments | Page 146

38. Construction of a qualifying asset is started on April 1 and
finished on December 1. The fraction used to multiply an expenditure
made on April 1 to find weighted-average accumulated expenditures is
a. 8/8.
b. 8/12.
c. 9/12.
d. 11/12.
39. When funds are borrowed to pay for construction of assets that
qualify for capitalization of interest, the excess funds not needed to pay
for construction may be temporarily invested in interest-bearing
securities. Interest earned on these temporary investments should be
a. offset against interest cost incurred during construction.
b. used to reduce the cost of assets being constructed.