Under Private Entity GAAP, the Cost for Environmental Clean-Up Costs

question 12

Multiple Choice

Under Private Entity GAAP, the cost for environmental clean-up costs at the end of an asset's useful life are

• A)Expensed as incurred
• B)Recognized only if they represent a legal obligation.
• C)Are capitalized once they have become apparent.
• D)None of the above

---

Definitions:

Expenses

Costs incurred in the process of earning revenue, which are subtracted from revenues to calculate net income.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity.

Balance Sheet

A financial statement that provides a snapshot of a company’s financial position, showing assets, liabilities, and shareholders' equity at a specific point in time.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, indicating the net profit or loss.