Which of the Following Must Be Capitalized by a Business

question 43

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) Replacement 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:

Absorb Bumps

The ability of a vehicle's suspension system to dampen the impact from road irregularities, providing a smoother ride.

Body Roll

The tendency of a vehicle's body to lean to one side during cornering, affecting stability and handling.

Compress Spring

The act of applying force to a spring to decrease its length temporarily, storing potential energy that can be released when the force is removed.

Unsprung Weight

Vehicle weight that is suspended beneath the springs and therefore is not carried by the springs. Examples include the weight of the wheels and tires, brake components, control arms, steering knuckles, and some rear axles.