Which of the following must be capitalized by a business?

Question

Quizplus · Accepted Answer

According to generally accepted accounting principles (GAAP), expenses that enhance or extend the useful life of a long-term asset should be capitalized rather than expensed. In this case, the replacement of a windshield is a routine repair and does not extend the useful life of the truck, so it can be expensed. However, the replacement of a roof and the payment for a covenant not to compete both enhance the usefulness of a long-term asset and should be capitalized.

Which of the Following Must Be Capitalized by a Business