Capitalizing Costs That Should Be Expensed

question 20

Multiple Choice

Capitalizing costs that should be expensed:

• A) is a practice mostly found in large, well-established companies.
• B) usually has no effect on net income.
• C) has the effect of increasing net income by the same amount of the capitalized costs.
• D) is a healthy practice if they are written off shortly after the transaction takes place.

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Definitions:

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