Which of the following types of subsequent expenditures normally is capitalized?
A) An extension of the useful life of the asset.
B) An increase in the operating efficiency of the asset.
C) An increase in the quality of the goods or services produced by the asset.
D) All of these answer choices are normally capitalized.

Question

Quizplus · Accepted Answer

Capitalizing subsequent expenditures is appropriate when the expenditures provide benefits extending beyond the current period. This includes extending the useful life of the asset (A), increasing the operating efficiency of the asset (B), and improving the quality of goods or services produced by the asset (C). All these actions enhance the asset's future economic benefits, justifying capitalization.

Which of the Following Types of Subsequent Expenditures Normally Is