NACVA Exam CVA Topic 3 Question 56 Discussion

Actual exam question for NACVA's CVA exam

Question #: 56
Topic #: 3

[All CVA Questions]

Many cost items fall into a ''___________'', in which the decision to expense or to capitalize the expenditures is subjective. One such decision is the dividing line between maintenance expenditures, which are expenses and capital improvements, which are capitalized.

AWhite area

BGary area

CRed area

DWhite and gray area

Show Suggested Answer

Suggested Answer: D

by Lashawnda at Aug 19, 2022, 02:41 AM

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Ciara

14 days ago

Hmm, I'm going with D. Reminds me of my first accounting class - the professor was always talking about these tricky 'gray areas' in financial reporting.

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Romana

15 days ago

D definitely sounds like the right choice. Accounting for these types of expenditures is rarely black and white - there's a lot of gray area that requires careful judgment.

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Ernie

4 days ago

I agree, it can be tricky to determine whether to expense or capitalize certain costs.

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Junita

17 days ago

The 'white and gray area' seems like the most appropriate answer here. Cost classification can be quite subjective, and the line between maintenance and capital improvements is often blurry.

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