Expenditures for long-lived assets are expensed when they
A)add new assets.
B)increase capacity.
C)improve efficiency.
D)provide benefits lasting one year or less.
E)lengthen an asset's useful life.

Question

Quizplus · Accepted Answer

Expenditures for long-lived assets that provide benefits lasting one year or less are expensed. This includes maintenance and repair costs. All other options (adding new assets, increasing capacity, improving efficiency, and lengthening an asset's useful life) generally result in capitalizing the expenditures and recording them as an asset on the balance sheet.

Expenditures for Long-Lived Assets Are Expensed When They