When making business buying decisions, it is important to remember that:
A) capital item purchases can't be fully charged off to the current year's expenses.
B) expense items are depreciated over several years.
C) large purchases must be expensed in one year.
D) capital items are expensed in one year-making them less risky to buy.
E) expense items are very risky since they cannot be depreciated.

Question

Quizplus · Accepted Answer

Capital item purchases (such as equipment or vehicles) typically need to be depreciated over several years, meaning they can't be fully charged off as an expense in the current year. This has implications for budgeting, cash flow, and tax purposes. It's important to keep this in mind when making purchasing decisions.

When Making Business Buying Decisions, It Is Important to Remember