Question

Asset acquisition costs that are not expensed immediately are referred to as capital expenditures.

Select one:
A. True
B. False

Answer 1

Capital expenditures are the costs for acquiring long-term assets and are not expensed immediately, which is true. These investments can be in the form of equipment, structures, and real estate. The correct option is A. True

Step-by-step explanation:

Capital expenditures are costs for acquiring assets that a company will use for a long period, rather than expensing these costs immediately. This statement is True. Assets that incur capital expenditures include producer's durable equipment and software, nonresidential structures like factories and offices, and residential structures.

While businesses are responsible for most types of capital expenditure, household investment is typically in residential structures. Fixed costs, like rent for factory space, are also related to capital expenditures in that they do not vary with the level of production. The correct option is A. True