A company recently purchased a building that it plans to renovate to get ready for use in its operations. All expenditures to repair and renovate the existing building for its intended use are charged to:
A) land.
B) land improvements.
C) land improvements expense.
D) building.

Question

Quizplus · Accepted Answer

All expenditures related to repairs and renovations of an existing building should be capitalized and charged to the building account. This will increase the company's asset value on the balance sheet and provide future benefits from using the building for its intended purpose. Options A and B are not applicable as they refer to land-related expenditures, and option C is not a recognized account in financial reporting.

A Company Recently Purchased a Building That It Plans to Renovate