Because Installation Costs of a New Asset Are a Current

question 73

True/False

Because installation costs of a new asset are a current cash expense, they are excluded from the initial outlay.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business.

Deferred Revenues

Deferred revenues refer to money received by a business for goods or services yet to be delivered or performed, recorded as a liability on the balance sheet until the obligation is fulfilled.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of a business.