The cost of a long-term asset is expensed
A)in the period in which it is sold.
B)in the period in which it is acquired.
C)as the asset benefits the company.
D)when it is paid for.

Question

Quizplus · Accepted Answer

The cost of a long-term asset is not expensed in the period it is sold, nor when it is paid for. It is also not expensed in the period it is acquired unless it is an expense associated with the acquisition (such as legal or appraisal fees). Generally, the cost of a long-term asset is capitalized (recorded as an asset on the balance sheet) and then systematically allocated to expense over its useful life as it benefits the company.

The Cost of a Long-Term Asset Is Expensed