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AICPA Exam CPA-Regulation Topic 3 Question 1 Discussion
Actual exam question for
AICPA's
CPA-Regulation exam
Question #: 1
Topic #: 3
[All CPA-Regulation Questions]
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?
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.
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