To Capitalize an Expenditure Is To

question 212

Multiple Choice

To capitalize an expenditure is to:

• A)Debit an expense account.
• B)Credit an expense account.
• C)Credit the owner's capital account.
• D)Credit an asset account.
• E)Debit an asset account.

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Definitions:

Operating Profit

Earnings before interest and taxes (EBIT), representing the profit a company makes from its operations after subtracting operating expenses from revenue.

Sales Mix

The proportion of different products or services that make up the total sales of a company.

Unit Contribution Margin

The amount each unit sold contributes to covering fixed costs and generating profit, calculated by subtracting variable costs per unit from the selling price per unit.

Break-Even Point

The financial point at which total revenues equal total costs and expenses, resulting in no net loss or gain.