To Capitalize an Expenditure Is To

question 91

Multiple Choice

To capitalize an expenditure is to:

• A) Debit an expense account.
• B) Credit an expense account.
• C) Debit an asset account.
• D) Credit an asset account.
• E) Credit the owner's capital account.

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Definitions:

Household Purchases

Refers to the total spending by households on goods and services for personal use.

Capital Equipment

Items such as machinery and tools that are used in the production process and have a useful life beyond a single accounting period.

Depreciation

The process by which capital assets decrease in value over time due to use, wear and tear, or becoming outdated.

Gross National Product

A measure of a nation's total economic output, including the value of all goods and services produced by its citizens, regardless of where they are located.