Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Introduction to Adjusting Journal Entries and Prepaid Expenses

Financial Accounting

3. Accrual Accounting Concepts

Introduction to Adjusting Journal Entries and Prepaid Expenses

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following costs are capitalized for self-constructed assets?

Only direct materials and direct labor

Direct materials, direct labor, and a portion of overhead costs

Interest expense on unrelated loans

Only indirect costs such as administrative expenses

Previous problemNext problem

Verified step by step guidance

Understand the concept of capitalizing costs: Capitalizing costs means recording them as part of the asset's value on the balance sheet rather than expensing them immediately. This is done for costs that provide future economic benefits.

Identify the types of costs associated with self-constructed assets: Self-constructed assets typically involve direct materials, direct labor, and overhead costs incurred during construction.

Determine which costs qualify for capitalization: Direct materials and direct labor are directly attributable to the construction process and are capitalized. Overhead costs, if they are related to the construction activity, can also be allocated and capitalized.

Exclude costs that do not qualify for capitalization: Interest expense on unrelated loans and indirect costs such as administrative expenses are not directly tied to the construction of the asset and are therefore not capitalized.

Summarize the correct answer: The costs that are capitalized for self-constructed assets include direct materials, direct labor, and a portion of overhead costs that are attributable to the construction process.