Costs incurred to increase the operating efficiency or useful life of a plant asset are referred to as
A) capital expenditures.
B) expense expenditures.
C) ordinary repairs.
D) revenue expenditures.

Question

Quizplus · Accepted Answer

Costs incurred to increase the operating efficiency or useful life of a plant asset are referred to as capital expenditures. Capital expenditures are usually long-term investments in the company's infrastructure, such as purchasing a new machine or updating an existing one, or a new building. These expenses are capitalized as assets and depreciated over their useful lives.

Costs Incurred to Increase the Operating Efficiency or Useful Life