An expenditure made in connection with a machine being used by an enterprise should be
A) expensed immediately if it merely extends the useful life but does not improve the quality.
B) expensed immediately if it merely improves the quality but does not extend the useful life.
C) capitalized if it maintains the machine in normal operating condition.
D) capitalized if it increases the quantity of units produced by the machine.

Question

Quizplus · Accepted Answer

Expenditures that increase the capacity or efficiency of an asset, such as increasing the quantity of units produced, should be capitalized as they provide future economic benefits.

An Expenditure Made in Connection with a Machine Being Used