Question

A company constructs a building for its own use. Which financial statement will reflect this construction cost?

a) Balance Sheet
b) Income Statement
c) Cash Flow Statement
d) Statement of Retained Earnings

Answer 1

The financial statement that will reflect the construction cost of a building is the Balance Sheet.

Step-by-step explanation:

The financial statement that will reflect the construction cost of a building is the Balance Sheet.

The Balance Sheet is a financial statement that shows a company's financial position at a specific point in time. It includes the company's assets, liabilities, and owner's equity. The construction cost of a building will be recorded as part of the company's assets on the Balance Sheet.

For example, if a company constructs a building for its own use and incurs costs of $500,000, this amount will be recorded as an increase in the building asset on the Balance Sheet.