Capital expenditures are not immediately expensed because these items:
A) do not extend the life of an asset.
B) return an asset to its prior condition.
C) increase the asset's capacity.
D) do all of the above.

Question

Quizplus · Accepted Answer

Capital expenditures are not immediately expensed because they add to the asset's capacity by increasing its value, productivity, and efficiency through improving the quality, functionality, and lifespan of a fixed asset. These benefits are expected to last for more than one accounting period, which supports capitalization rather than expensing.

Capital Expenditures Are Not Immediately Expensed Because These Items