Treating Capital Expenditures of a Small Dollar Amount as Revenue

question 52

True/False

Treating capital expenditures of a small dollar amount as revenue expenditures is likely to mislead the users of financial statements.

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Definitions:

Long-Term Liability

A financial obligation due after more than one year.

Current Liability

Short-term financial obligations that are due within one year or within a company's operational cycle, whichever is longer.

Long-Term Debt

Borrowings and financial obligations of a business or organization that are due for repayment more than one year in the future.

Discounted Note

A financial instrument, such as a promissory note, that is sold or bought at less than its face value. The discount represents the interest or fees earned by the buyer of the note.