Which of the Following Must Be Capitalized by a Business

question 30

Multiple Choice

Which of the following must be capitalized by a business?

• A) Replacement of a windshield of a business truck which was broken in an accident.
• B) Repair of a roof of a building used in business.
• C) Amount paid for a covenant not to compete.d. Only b. and c. must be capitalized.e. a., b., and c. can be expensed rather than capitalized.

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Definitions:

Stockholders' Equity

Stockholders' equity represents the ownership interest of shareholders in a corporation, calculated as total assets minus total liabilities.

Shares

Shares represent units of ownership interest in a corporation or financial asset, providing an entitlement to a portion of the company's profits and assets.

Book Value

The net value of a company's assets as recorded on the balance sheet, calculated as total assets minus intangible assets and liabilities.