Which criterion (criteria)should capital expenditures meet?
A) The quantity of services from the asset will be increased through a longer useful life.
B) The quantity of services from the asset will be increased with more units of output.
C) The quality of the service received from using the asset will be increased.
D) Capital expenditures should meet at least one of the previous criteria.

Question

Quizplus · Accepted Answer

Capital expenditures should meet at least one of the criteria listed in options A, B, or C. All of these criteria aim at increasing the benefits or usefulness of the asset, either in terms of quantity or quality. Therefore, any capital expenditure that does not meet any of these criteria might not be justifiable or worth the cost.

Which Criterion (Criteria)should Capital Expenditures Meet