Costs that do not extend the asset's capacity or its useful life, but merely maintain the asset or restore it to working order are recorded as:
A) capital expenditures.
B) expenses.
C) additions.
D) improvements.

Question

Quizplus · Accepted Answer

Costs that do not extend the asset's capacity or useful life, but merely maintain the asset or restore it to working order are considered expenses. Capital expenditures, on the other hand, involve costs that add value to the asset or extend its useful life. Additions and improvements involve adding or modifying assets to increase their capacity or efficiency, and would also be classified as capital expenditures.

Costs That Do Not Extend the Asset's Capacity or Its