Capitalization Is a Process Of

question 29

Multiple Choice

Capitalization is a process of:

• A) establishing the cost of capital
• B) converting an income flow into value
• C) computing gross income
• D) determining reserves for depreciation

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Definitions:

Income Statement Reporting

The process of presenting revenue, expenses, and profits or losses over a specific period in an income statement.

Other Postretirement Benefits

Benefits, other than pension distributions, that an employee is entitled to receive after retirement, such as life insurance and medical benefits.

Cash Basis of Accounting

An accounting method where revenues and expenses are recognized only when cash is received or paid.

Accrual Basis of Accounting

Accrual basis of accounting is a method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash is actually received or paid.