All categories

3 years ago

What are the criteria for distinguishing between a deductible expense and a capital expenditure?

1 answer:

6 0

The criteria for distinguishing between whether an expenditure is a capital item or a deductible expense is the useful life of the item.

If the purchase is going to be used and no longer have value at the end of the reporting period it is an expense for that period. If the item is a capital item it is going to have a longer useful life. In this case the item is depreciated over its useful life, assigning an expense amount to each accounting period that the item has value.

You might be interested in

After 8 years of working for a company that installed underground sprinkling systems for golf courses, Jake was ready to venture

Shkiper50 [21]

Answer:

two strengths and one threat

Explanation:

Since in the given situation it is mentioned that that Jake was fortunate to have $100,000 financing also the skilled installers are willing to work but at the same time he was aware that the new construction was all time low

So here there are two strengths and one threat

In this way the events are categorized

7 0

3 years ago

Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area

notsponge [240]

Answer:

$50,094.8

Explanation:

Flexible Budget are budget prepared by taking the actual activity level achieved at standard cost/price. WHILE

q is taken as the actual level of activity which is 240 diving hours.

Puget Sound Divers

Flexible Budget For the Month Ended May 31

Revenue ($440.00 ×240) $105,600

Expenses:

Wages and salaries ($11,800 + $128.00×240) $42,520

Supplies ($3.00 ×240) $720

Equipment rental ($2,100 + $22.00 ×240) $7,380

Insurance ($4,000) $4,000

Miscellaneous ($530 + $1.48×240) $885.2

Total expense $55,505.2

Net operating income ($105,600- $55,505.2) $ 50,094.8

Net operating income =Revenue - Total expenses

3 0

3 years ago

Read 2 more answers

Managers choose the manufacturing location for each product based on where the best combination of cost, quality, and technology

Bingel [31]

Answer:

The correct answer is letter "D": rationalization.

Explanation:

Rationalization refers to the restructuring of a company in terms of changing its operational processes, strategy, or corporate size on an attempt of increasing its efficiency. That stage is reached by reducing costs and increasing profits. The introduction of a new product could push a firm to rationalize whether to expand or cut part of its operations.

5 0

3 years ago

An auditor wants to verify that for a given inventory acquisition, (1) the merchandise was ordered by the company, (2) the merch

choli [55]

The answer is: 1. the merchandise was ordered by the company

The auditor could easily obtain this information by looking at the company's purchase order. Purchase order would contain information regarding sellers, types of products, dates, prices, and quantities of the products ordered. This information is what the auditor need to fully verify the inventory acquisition.

5 0

3 years ago

Which of the following is a good example of inflation? O A. You work three jobs in order to pay your bills. It cost you $85 to g

BlackZzzverrR [31]

It cost you $85 to gas up your car this month. But last month it cost you $50. This is inflation

7 0

3 years ago