If a Company Classifies an Expenditure as a Capital Expenditure

question 6

Multiple Choice

If a company classifies an expenditure as a capital expenditure instead of a revenue expenditure, which of the following will be false?

• A) Profit for the year of acquisition will be higher.
• B) The initial cost basis of the asset will be higher.
• C) Depreciation expense will be higher over the asset's life.
• D) It will be expensed in the year in which the expenditure takes place.

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