Jim and Peggy own an income-tax service and are planning to purchase a $35,000 computer system including software. The proposed expenditure should be allocated to their capital-expenditure budget.

Question

Quizplus · Accepted Answer

The purchase of a computer system including software is a capital expenditure, which involves investing in a long-term asset that will benefit the business for several years. Therefore, it should be allocated to the capital-expenditure budget, which is used to finance long-term investments.

Jim and Peggy Own an Income-Tax Service and Are Planning