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:

Marketing Channel

A set of practices or activities necessary to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption and, as such, which consists of all the institutions and all the marketing activities in the marketing process.

Distribution Center

A warehouse or specialized facility where products are stored and organized for the purpose of redistributing goods to retailers, wholesalers, or directly to consumers.

UPC Tag

A barcode label that contains a unique product identification code used in retail to track and manage inventory, facilitating the checkout process and inventory management.

UPC

Universal Product Code, a barcode symbol that retailers use to track trade items in stores and inventory systems.