Capitalizing an Expenditure Rather Than Recording It as a Revenue

question 150

Multiple Choice

Capitalizing an expenditure rather than recording it as a revenue expenditure

• A)impacts the total book value of plant assets reported on the balance sheet and the amount of net income reported during a period.
• B)impacts the total book value of plant assets on the balance sheet, but has no effect on the amount of net income reported during an accounting period.
• C)impacts the amount of net income reported during an accounting period, but has no effect on the total book value of plant assets on the balance sheet.
• D)has no impact on the book value of plant assets on the balance sheet or the amount of income reported on the income statement.

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Definitions:

That's-not-all Technique

A persuasion method where an offer is made, but before making a decision, an additional item or bonus is added to make the offer seem more appealing.

Door-in-the-face Technique

A compliance method whereby a large, unreasonable request is first made and expected to be refused, followed by a smaller, more reasonable request.

Low-ball Technique

A persuasion and sales strategy where an initial, lower price is offered to gain agreement from a buyer, only to increase the price by introducing additional costs or factors.

Social Loafing

A phenomenon observed in group settings wherein individuals put in less effort on a task when working collectively compared to when working individually.