Galvan Corporation (GC)capitalized a $20,000 automobile.Which of the following is true?
A)GC recorded a liability for $20,000.
B)GC recorded an asset for $20,000.
C)GC recorded an expense for $20,000.
D)GC recorded Contributed Capital for $20,000.

Question

Quizplus · Accepted Answer

Galvan Corporation capitalized a $20,000 automobile, which means they recorded an asset for $20,000. A capitalized asset is an asset that a company has recorded to its balance sheet and has extended the useful life of, rather than recording the expense immediately.

Galvan Corporation (GC)capitalized a $20,000 Automobile