Which of the Following Equipment Related Costs Is Not Capitalized

question 66

Multiple Choice

Which of the following equipment related costs is not capitalized on a balance sheet?

• A)Equipment installation costs.
• B)Transportation costs associated with the equipment purchase.
• C)Equipment maintenance costs.
• D)The equipment's purchase price.

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Definitions:

Payback Period

An alternative metric to calculate the duration required for an investment to recoup its initial costs, measuring the risk and efficiency of the investment.

Initial Cost

The initial expenditure required to acquire an asset or to start a project, including purchase price and any associated set-up fees.

Investment

Allocation of resources, usually money, in order to generate income or profit.

Cash Flows

The total amount of money being transferred into and out of a business, especially regarding liquidity.