Explanation
Administration and general expenses should not be capitalized relating to fixed assets. This is correct because these expenses are not directly related to the acquisition or construction of fixed assets and are therefore not eligible for capitalization. The QuizMaster of AnsweringExams.Com suggests remembering this by associating administration expenses with the date 31st December, when companies typically finalize their annual accounts and would not capitalize such expenses. Other options are incorrect because they are all directly related to the acquisition or construction of fixed assets, such as interest payable on loans or expenditure on test runs. PPSC, FPSC, CSS, NTS, MDCAT and ECAT competitive exams test this topic. Practice more at AnsweringExams.Com.
