Question Details

Which of the following types of interest cost incurred 



1.	Which of the following is correct?
a.	Selling costs are product costs.
b.	Manufacturing overhead costs are product costs.
c.	Interest costs for routine inventories are product costs.
d.	All of these.

	2.	Costs which are inventoriable include all of the following except 
a.	costs that are directly connected with the bringing of goods to the place of business of the buyer.
b.	costs that are directly connected with the converting of goods to a salable condition.
c.	buying costs of a purchasing department.
d.	selling costs of a sales department.

	3.	Which of the following types of interest cost incurred in connection with the purchase or manufacture of inventory should be capitalized as a product cost?
a.	Purchase discounts lost
b.	Interest incurred during the production of discrete projects such as ships or real estate projects
c.	Interest incurred on notes payable to vendors for routine purchases made on a  repetitive basis
d.	All of these should be capitalized.

	4.	The use of a Discounts Lost account implies that the recorded cost of a purchased inventory item is its
a.	invoice price.
b.	invoice price plus the purchase discount lost.
c.	invoice price less the purchase discount taken.
d.	invoice price less the purchase discount allowable whether taken or not.

	5.	The use of a Purchase Discounts account implies that the recorded cost of a purchased inventory item is its
a.	invoice price.
b.	invoice price plus any purchase discount lost.
c.	invoice price less the purchase discount taken.
d.	invoice price less the purchase discount allowable whether taken or not.




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