Expenditures that maintain the operating efficiency and expected productive life of a long-lived asset are generally
A) expensed when incurred.
B) capitalized as a part of the cost of the asset.
C) debited to the accumulated depreciation account.
D) not recorded until they become material in amount.

Question

Quizplus · Accepted Answer

Expenditures that maintain the operating efficiency and expected productive life of a long-lived asset are typically expensed when incurred because they are considered routine maintenance and repairs. These costs do not extend the asset's useful life beyond its original estimate nor improve its capacity, so they are treated as period costs and expensed in the period they are incurred to match the expense with the revenue it helps to generate.

Expenditures That Maintain the Operating Efficiency and Expected Productive Life