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An Auto Body Shop Is Trying to Decide Whether or Not

question 126

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An auto body shop is trying to decide whether or not to purchase a new piece of diagnostic equipment.Which of the following costs would not be relevant to the decision?


Definitions:

Income Taxes Payable

Liabilities owed to the government for income taxes, not yet paid by the company.

Income Tax Expense

The total amount of income tax a company is obligated to pay to the government, reported on its income statement.

Investing Activities

Financial actions that involve the purchase of long-term assets, securities, or other investments to generate future income or value.

Sale of Equipment

The process of disposing or selling a company's equipment assets, which may result in a gain or loss reflected in the income statement.

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