The following items represent common postacquisition expenditures incurred on equipment.
A. An overhaul to increase useful life of the equipment
B. Replacement of muffler
C. Lubrication service
D. Costs of redesign to increase output
Identify which of these items are considered to be betterments.

Question

Quizplus · Accepted Answer

Only options A and D are considered betterments as they result in an increase in the asset's future economic benefits. Option B, replacement of muffler, is considered a repair expense and does not result in an increase in the asset's useful life or future economic benefits. Option C, lubrication service, is considered a maintenance expense and is necessary to keep the equipment running efficiently but does not result in an increase in the asset's useful life or future economic benefits.

The Following Items Represent Common Postacquisition Expenditures Incurred on Equipment