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If a Company Classifies an Expenditure as a Capital Expenditure

Question 6

Multiple Choice

If a company classifies an expenditure as a capital expenditure instead of a revenue expenditure, which of the following will be false?


A) Profit for the year of acquisition will be higher.
B) The initial cost basis of the asset will be higher.
C) Depreciation expense will be higher over the asset's life.
D) It will be expensed in the year in which the expenditure takes place.

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