Which of the Following Is a Correct Statement Regarding the Expensing

question 177

Multiple Choice

Which of the following is a correct statement regarding the expensing or capitalization of items?

• A) Most companies expense all material costs above a certain amount, even if they are capital items.
• B) A conservative policy regarding expensing of items is one that avoids understating assets.
• C) The distinction between a capital expenditure and an immediate expense is clear cut.
• D) A conservative policy regarding expensing of items is one that avoids overstating profits.