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Which costs associated withcomputer should not be recorded

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Problem 1: Central National Bank recently acquired a new computer system. Which of the following costs associated with the computer should not be recorded in the Equipment account?

a. System programmer wages for personnel hired to install the system.
b. Insurance coverage covering the transport period from the manufacturer.
c. Replacement of several circuit boards damaged during installation.
d. Installation of a backup power source required for the computer.

Problem 2: Interest is capitalized when incurred in connection with the construction of plant assets because

a. many plant assets last longer than 20 years.
b. the decision to purchase a plant asset is a business decision separate from the financing decision.
c. interest is considered a part of the acquisition cost of the related plant asset.
d. interest is considered an expense of the period.

Reference no: EM132794782

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