Question

Costs incurred prior to the starting of a business, or shortly thereafter that relate to creating the business entity, are referred to as:

a. Pre-operating Costs
b. Start-up Costs
c. Organizational Costs
d. Preliminary Expenses

Answer 1

Start-up costs refer to the expenses incurred before or shortly after the start of a business to create the business entity.

Step-by-step explanation:

The costs incurred prior to the starting of a business, or shortly thereafter that relate to creating the business entity, are referred to as Start-up Costs. These costs include expenses such as market research, legal fees, advertising, and hiring staff. Start-up costs are crucial for getting the business off the ground and are typically one-time expenses.