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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Gregoria

3 months ago

Haha, 'white and gray area' - sounds like an avant-garde art exhibit, not an accounting concept. But D is the right pick here.

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Ammie

3 months ago

D is the way to go. Sometimes I feel like accountants just make up these terms like 'white and gray area' to keep us on our toes!

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Leota

3 months ago

I think D makes sense, it's not always black and white when it comes to accounting decisions.

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Thora

3 months ago

Yeah, it's definitely a gray area sometimes. You have to consider the specific circumstances.

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Esteban

3 months ago

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

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Ciara

4 months 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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Gene

3 months ago

Yeah, it's definitely a gray area that requires careful consideration.

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Claribel

4 months ago

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

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Romana

4 months 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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Staci

3 months ago

Definitely, having clear policies in place can help ensure consistency in treatment of costs.

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Allene

3 months ago

I think it's important to follow accounting standards and guidelines when making these decisions.

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Mirta

3 months ago

Yes, it's important to carefully consider the impact on financial statements.

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Ernie

4 months ago

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

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Junita

4 months 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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