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Capitalization versus expensing

Using course materials, the internet, and/or the Library answer the following questions:

What is the fundamental issue surrounding capitalization versus expensing?

Which approach do you believe management would prefer?

Which approach do you believe auditors would prefer? Why?

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The response addresses the queries posted in 789 words with references.

//The paper discusses the fundamental issue that revolves around the concept of the Capitalization and the Expensing. Before starting a paper like this, it is imperative to provide a succinct introduction about the concept of the capitalization and the expensing. In addition to this, it also talks about the approach that is adopted or preferred by the management in the organization.//

Fundamental Issues in Capitalization versus Expensing

The main difference that lies between the Capitalization and the Expensing is determined in this manner that while running a business if an expenditure is made out, and if it is capable enough to produce an asset for the organization, then it is considered to be an asset for the organization. However, on the contrary, if nothing productive is experienced, it is counted to be an expense for the organization. This is the major difference between these two concepts (Cherecwich, 1996).

The major issue that encircles the concept of capitalization and the expensing is such that it takes into account the consideration that revolves around the condition of determination of the expense as the capitalization or the ...

Solution Summary

The response addresses the queries posted in 789 words with references.