An Expenditure That Benefits Year One but Is Paid for in Year

question 50

True/False

An expenditure that benefits year one but is paid for in year two should not be capitalized until year two.

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing better budgeting accuracy.

Occupancy Expenses

Costs associated with occupying a space, including rent, utilities, and other maintenance fees.

Client-Visits

The act of meeting with clients or potential clients in person to discuss business, build relationships, or offer support.

Flexible Budget

A flexible budget that varies with activity levels or volume, enabling more precise budgeting and analysis of discrepancies.