An expenditure subsequent to acquisition of assembly-line manufacturing equipment benefits future periods.The expenditure should be capitalized if it is a Betterment Rearrangement
A) Yes Yes
B) Yes No
C) No Yes
D) No No

Question

Quizplus · Accepted Answer

A betterment increases the future economic benefits of the asset beyond its originally assessed standard of performance, thus it should be capitalized. Rearrangement costs, if they do not increase the future economic benefits, are typically expensed, but in the context of assembly-line manufacturing equipment, if the rearrangement leads to more efficient production or extends the asset's useful life, it can also be capitalized.

An Expenditure Subsequent to Acquisition of Assembly-Line Manufacturing Equipment Benefits