Which Two of the Following Actions Would Be Classed as 'Capitalisation

question 13

Multiple Choice

Which two of the following actions would be classed as 'capitalisation'?

• A) Removing funds from the equity capital to create 'profit' in the balance sheet
• B) Taking an item of expenditure on to the balance sheet and capitalising it as an asset
• C) Taking an item of expenditure and writing it against profit as an expense
• D) Increasing the firm's capital by issuing shares

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Definitions:

Circumplex Model

A model describing human emotions as existing in a two-dimensional space, with levels of arousal and valence defining the axes.

Valence

The intrinsic attractiveness or averseness of an event, object, or situation.

Arousal

A physiological and psychological state of being awake or reactive to stimuli, involving the activation of certain physiological pathways and cognitive processes.

Two-factor Theory

A psychological theory suggesting emotions are based on physiological arousal and cognitive labels.