To Be Capitalized,an Expenditure Must ________

question 94

Multiple Choice

To be capitalized,an expenditure must ________.

• A)extend the useful life of a long-term asset
• B)enhance the operating efficiency of a long-term asset
• C)be reasonable and necessary to put a long-term asset into a working condition
• D)all of these

---

Definitions:

Investment

The allocation of resources, usually money, in the expectation of generating an income or profit in the future.

Present Benefits

The advantages or positive outcomes that are received or enjoyed at the current time, as opposed to benefits that may accrue in the future.

Future Benefits

Expected advantages or gains that will be received in the future as a result of current investments or actions.

Production Possibility Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs resources and technology, illustrating trade-offs and opportunity costs.