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Which of the following items should not be capitalized relating to fixed assets?
Accountingmedium
AInterest payable on loans or deferred credits taken for the acquisition or construction of fixed assets before they are ready for use
BStand by equipment and servicing equipment
CExpenditure incurred on test runs and experimental production
Administration and general expenses Only those expenses which relate to and specifically attributable to the asset are capitalized. Administration and general expenses cannot be specifically attributable to the asset and hence cannot be capitalized.
Correct Answer: D. Administration and general expenses Only those expenses which relate to and specifically attributable to the asset are capitalized. Administration and general expenses cannot be specifically attributable to the asset and hence cannot be capitalized.
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