Match the proper deduction method with the correct expenditures.
-Start-up costs over $5,000.
A)Capitalized and amortized over a number of accounting periods
B)Expensed in the period incurred
C)Not deductible
D)Can be capitalized and amortized or deductible depending on the amount of the expenditure

Question

Quizplus · Accepted Answer

Whether start-up costs can be capitalized and amortized or deducted immediately as an expense depends on the amount of the expenditure. If the start-up costs are over $5,000, they can be capitalized and amortized over a number of accounting periods. If the start-up costs are $5,000 or less, they can be deducted immediately as an expense in the period incurred. If the start-up costs are not related to the creation of a new business, they are not deductible at all.

Match the Proper Deduction Method with the Correct Expenditures