A company spends $20 million dollars for an office building. Over what period should the cost be written off?

A) When the $20 million is expended in cash.
B) All in the first year.
C) Over the useful life of the building.
D) After $20 million in revenue is recognized.

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Christian Washington · Accepted Answer

Final Answer : C, Explanation :  The cost of the office building should be written off over its useful life, which is typically 20-40 years. This method of accounting is called depreciation and allows the company to spread out the cost of the building over its useful life, rather than taking the entire expense in one year.

A company spends $20 million dollars for an office building. Over what period should the cost be written off?

A) When the $20 million is expended in cash.
B) All in the first year.
C) Over the useful life of the building.
D) After $20 million in revenue is recognized.

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Learning Objectives

Related questions

A company spends $20 million dollars for an office building. Over what period should the cost be written off?A) When the $20 million is expended in cash.B) All in the first year.C) Over the useful life of the building.D) After $20 million in revenue is recognized.

Definitions

Learning Objectives

Learning Objectives

Related questions

A company spends $20 million dollars for an office building. Over what period should the cost be written off?

A) When the $20 million is expended in cash.
B) All in the first year.
C) Over the useful life of the building.
D) After $20 million in revenue is recognized.