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AICPA Exam CPA-Business Topic 3 Question 86 Discussion

Actual exam question for AICPA's CPA-Business exam
Question #: 86
Topic #: 3
[All CPA-Business Questions]

In planning and controlling capital expenditures, the most logical sequence is to begin with:

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Suggested Answer: C

Choice 'c' is correct. The most logical sequence in planning and controlling capital expenditures is to begin with identifying capital addition projects and other capital needs.

Choice 'a' is incorrect. Analyzing capital addition proposals omits other capital needs.

Choice 'b' is incorrect. Analyzing and evaluating all promising alternatives is beyond the scope of planning and controlling capital expenditures.

Choice 'd' is incorrect. Developing capital budgets is the same as planning and controlling capital expenditures.


by Karrie at Apr 28, 2024, 07:39 PM

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Alpha
5 months ago
Exactly. Identification has to come first, then analysis, then budgeting.
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Cortney
5 months ago
Maybe. But without identifying needs first, how can you evaluate alternatives?
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Chauncey
5 months ago
True, but B seems logical too. Evaluating all promising alternatives helps in making a better decision.
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Tiffiny
6 months ago
Makes sense. You need to know what you need first, right?
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Alpha
6 months ago
I think it's C. Identifying capital addition projects and other capital needs.
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Cortney
7 months ago
What do you think the right answer is for capital expenditures sequence?
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