Ordinary repairs are expenditures to maintain the operating efficiency of a plant asset and are referred to as
A) capital expenditures.
B) expense expenditures.
C) improvements.
D) revenue expenditures.

Question

Quizplus · Accepted Answer

Ordinary repairs are considered revenue expenditures because they do not add any significant value to the asset or extend its useful life. They are simply necessary costs to keep the asset operating efficiently. Capital expenditures, on the other hand, are expenditures that improve or enhance the asset and can increase its value or useful life. Improvements are also considered capital expenditures, as they involve significant changes or upgrades to the asset.

Ordinary Repairs Are Expenditures to Maintain the Operating Efficiency of a Plant