Which of the following expenditures would be most suspicious if it were capitalized?
a. Equipment purchases
b. Computer purchases
c. Prepaid expenses
d. Salaries to the top management
d
FEEDBACK: a. Incorrect. Equipment is generally considered an asset.
b. Incorrect. Computers could be considered assets.
c. Incorrect. Though payment for expenses, when paid before the expenses are incurred, pre-payments are considered assets.
d. Correct. Salaries, regardless for whom, are generally considered expenses in the period incurred.
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