Which of the following is a direct cost associated with construction that can be capitalized?

In construction accounting, a direct cost that can be capitalized is one that is directly attributable to the construction project itself and adds value to the asset being built. Site preparation involves the activities necessary to prepare the land for construction, such as clearing, grading, and excavation. These activities are essential for making the land usable for the intended construction and therefore qualify as direct costs that can be capitalized as part of the overall cost of the constructed asset.

Other options, while they are important to the project or ongoing operations, do not directly contribute to the physical construction of the asset itself. Property taxes, for example, are considered indirect costs and are related to ownership rather than construction. Staff training, while essential for operational efficiency, does not directly add to the physical asset and is also categorized as an indirect expense. Similarly, annual inspections are part of maintenance and operational ongoing costs, which are not capitalized as part of the cost of the construction. Therefore, site preparation stands out as the only option that relates directly to the construction and can be appropriately capitalized.