Question
Asked Jan 31, 2019
Question 12
Costs that are capitalized:
O Show up as an expense on the income statement without ever being recorded on the balance sheet
O None of the possible choices
O Will initially be recorded as an asset on the balance sheet
O Never exist as part of accrual accounting
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Question 12 Costs that are capitalized: O Show up as an expense on the income statement without ever being recorded on the balance sheet O None of the possible choices O Will initially be recorded as an asset on the balance sheet O Never exist as part of accrual accounting

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Step 1

Capital expenditure are those expenditures which relate to procurement, installation or development of an asset. Example of capital expenditure include Installation cost of machinery, production cost of manufactured goods (which forms part of inventory) Revenue expenditures means the expenditure pertaining to general business activities which form part of Income statement. Examples of Revenue expenditures include electricity,stationery, wages etc. 

Step 2

So, the costs that are capitalised will not show as an expense in the Income statement and ...

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