Additions and major inspections which are expected to benefit more than one period are capitalized, while routine maintenance expenditures are normally expensed.

Question

Quizplus · Accepted Answer

This statement is true. Expenditures that provide long-term benefits are capitalized and recorded as assets, while routine maintenance expenses are expensed as incurred. This is based on the matching principle, which requires that expenses be matched with related revenues or be recognized in the period they are incurred.

Additions and Major Inspections Which Are Expected to Benefit More