Expenditures included in the cost of a long-lived asset are:
A) intangible.
B) charged off.
C) expensed.
D) capitalized.

Question

Expenditures included in the cost of a long-lived asset are: 
A) intangible.
B) charged off.
C) expensed.
D) capitalized.

Quizplus · Accepted Answer

Expenditures that are included in the cost of a long-lived asset are capitalized, which means that they are recorded as part of the cost of the asset and not expensed immediately. This allows the costs to be spread out over the useful life of the asset through depreciation. Intangible assets are also capitalized, but they are a separate category from long-lived physical assets. Expenditures that are charged off or expensed are immediately recognized as expenses on the income statement.

Expenditures Included in the Cost of a Long-Lived Asset Are