A Company Has Incurred Some Routine Maintenance Costs

question 113

Multiple Choice

A company has incurred some routine maintenance costs. If they decide to capitalize these costs instead of expensing them, what would be the effect on cash from operations and cash from investing activities in that period?

• A) Cash from operations would increase; cash from investing would increase.
• B) Cash from operations would increase; cash from investing would decrease.
• C) Cash from operations would decrease; cash from investing would increase.
• D) Cash from operations would decrease; cash from investing would decrease.

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Definitions:

Critical Thinking

The intellectually disciplined process of actively and skillfully conceptualizing, applying, analyzing, synthesizing, and/or evaluating information gathered from observation, experience, reflection, reasoning, or communication.

Problem-Solving

The process of identifying a problem, finding alternatives for dealing with it, and then selecting and implementing a solution.

Decision-Making

Decision-making is the process of making choices by identifying a decision, gathering information, and assessing alternative resolutions.

Leadership Style

The manner and approach of providing direction, implementing plans, and motivating people.