Which of the following must be capitalized by a business?
A)Replacement of a windshield of a business truck which was broken in an accident.
B)Repair of a roof of a building used in business.
C)Amount paid for a covenant not to compete.
D)Only a.and c.must be capitalized.
E)a. ,b. ,and c.can be expensed rather than capitalized.

Question

Quizplus · Accepted Answer

The amount paid for a covenant not to compete is a capital expenditure because it provides a long-term benefit to the business. The replacement of a windshield and repair of a roof are typically considered repairs and maintenance, which are expensed rather than capitalized.

Which of the Following Must Be Capitalized by a Business