Pat's Pets recently paid to have the engine in its delivery van overhauled. The estimated useful life of the van was originally estimated to be 7 years. The overhaul is expected to extend the useful life of the van to 9 years. The overhaul is regarded as a(n):

Question

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The overhaul of the engine in the delivery van is a capital expenditure because it has increased the useful life of the van from 7 to 9 years. This means that the overhaul has provided an economic benefit beyond the current accounting period and has improved the company's ability to generate revenue over a longer period of time.

Pat's Pets Recently Paid to Have the Engine in Its