Which Statement Is True About a Company's Choice of Capitalization

question 15

Multiple Choice

Which statement is true about a company's choice of capitalization policy?

• A) All assets with a useful life of more than one year must be capitalized.
• B) The company's policy must meet the minimum capitalization amounts established by GAAP.
• C) The company's policy is determined relative to materiality and the cost of maintaining asset records.
• D) The company may elect to capitalize operating expenses which exceed the minimum threshold for asset capitalization.

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Definitions:

Reserve Army Of Labour

The reserve army of labour refers to a pool of unemployed or underemployed workers who can be quickly mobilized to meet labor needs, influencing wage levels and conditions within the capitalist system.

Profitability Of Capital

A measure of how effectively capital is used to generate profit, important for assessing the financial performance of businesses.

Economic-Organization Explanation

A rationale that describes phenomena or behaviors based on the structure and function of economic entities and their organizational contexts.

Remain Poor

A state wherein individuals or groups continue to live below the poverty line, unable to achieve economic mobility.