When an Expenditure Is Capitalized Instead of Being Recorded as a Revenue

question 67

Multiple Choice

When an expenditure is capitalized instead of being recorded as a revenue expenditure,what is the result?

• A) The total book value of plant assets reported on the balance sheet and the amount of net income reported during a period are both impacted.
• B) The total book value of plant assets reported on the balance sheet is impacted, but not the amount of net income reported during an accounting period.
• C) The amount of net income reported during the accounting period is impacted, but not the total book value of plant assets reported on the balance sheet.
• D) There is no impact on the book value of plant assets on the balance sheet or on the amount of income reported on the income statement.

---

Definitions:

Worth Or Importance

The perceived value or significance of something, often determining the attention and resources it receives.

Corporate Culture

Corporate culture refers to the beliefs, behaviors, and values that a company's employees share.

Internal Locus

A belief that one controls their own destiny and outcomes are the result of personal efforts.

Looking-Glass Self

The self you assume others see when they look at you.