true or false 1. When the cost of self-construction of an asset is less than the

Question

true or false

1.   When the cost of self-construction of an asset is less than the cost to acquire it through purchase or construction by outsiders, the difference is reported currently as a gain from self-constructed assets.

2.   Charges directly related to construction of an asset may be charged in full to the cost of the asset or allocated in part to normal operations.

3.   Property acquired through donation should be recorded at its fair market value.

4.   The practice of capitalizing construction period interest is supported by the concept of the proper matching of revenues and expenses.

5.   The practice of capitalizing construction period interest is supported by the concept of the proper matching of revenues and expenses.

  6.   Property acquired through donation should be recorded at its fair market value.

7.   In general, research and development expenditures should be expensed in the period incurred.

8.   All costs incurred in the development of computer software, up to the point where technological feasibility is established, are to be recorded as an intangible asset.

9.   Under current accounting rules, goodwill is recognized only when an entity is purchased in its entirety.

  10.   Incorrectly recording an expense as an asset overstates current earnings, assets, and owners' equity.

Explanation / Answer

1. False. It is Savings and not gain.

2. True

3. True

4. True

5. True

6. True

7. True

8. False

9. True

10. True

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