Which of the following would be expensed,rather than capitalized?

Question

Quizplus · Accepted Answer

Oil change and lubrication are routine maintenance expenses that are necessary for the continued operation of the asset and do not add significant value or increase the useful life of the asset. Therefore, they should be expensed as incurred rather than capitalized.

Answer: B
 Major engine overhaul involves significant improvements to the asset that increase its useful life or add substantial value to it. Therefore, it should be capitalized as a capital expenditure.

Answer: C
 A modification for a new use involves significant changes to the asset that result in a new or different use of the asset. Such modifications may increase the useful life of the asset or add substantial value to it. Therefore, they should typically be capitalized as a capital expenditure.

Answer: D
 An addition to storage capacity involves an improvement that results in a significant increase in the capacity of the asset. This may increase the asset's usefulness but does not significantly increase its useful life or add substantial value to it. Therefore, additions to storage capacity should be expensed as incurred rather than capitalized.

Which of the Following Would Be Expensed,rather Than Capitalized