AICPA Exam CPA-Regulation Topic 3 Question 1 Discussion

Actual exam question for AICPA's CPA-Regulation exam

Question #: 1
Topic #: 3

Under the uniform capitalization rules applicable to property acquired for resale, which of the following costs should be capitalized with respect to inventory if no exceptions are met?

AOption A

BOption B

COption C

DOption D

Show Suggested Answer

Suggested Answer: D

Choice "d" is correct. Under the uniform capitalization rules, purchasers of inventory for resale may deduct their marketing costs but must capitalize their off-site storage costs.

Choices "a", "b", and "c" are incorrect. Marketing costs are deductible, but off-site storage must be capitalized.

by Samira at May 06, 2022, 02:45 AM

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