Identify the following expenditures :
-Replacing a Pentium chip with a core 2 Duo chip, which increases productive capacity. No extension of useful life expected.
A) capital expenditures
B) revenue expenditures.

Question

Quizplus · Accepted Answer

Capital expenditures are costs incurred to increase the productive capacity or efficiency of an asset without extending its useful life. Replacing a Pentium chip with a Core 2 Duo chip to increase productive capacity falls under this category, as it enhances the asset's performance rather than maintaining it.

Identify the Following Expenditures