The distinction between a capital expenditure and an expense can be difficult to determine for a plant asset.

Question

Quizplus · Accepted Answer

This statement is true as there are certain costs related to plant assets, such as repairs and maintenance, that can be classified as either a capital expenditure or an expense depending on factors such as materiality, useful life, and impact on the asset's value. This can make it challenging to determine whether a cost should be capitalized or expensed.

The Distinction Between a Capital Expenditure and an Expense Can