Which of the following expenditures after acquisition would NOT be capitalized?
A) adding a new wing to a hospital
B) replacing the air conditioning system in an office building
C) major overhaul of a fleet of trucks
D) replacing all the tires on an 18-wheel semi-trailer

Question

Quizplus · Accepted Answer

The replacement of tires on a semi-trailer would be considered a maintenance expense and not an improvement or enhancement to the asset, and therefore should be expensed as incurred. The other options involve significant improvements or replacements to the assets that would increase their value or extend their useful life, and would therefore be capitalized.

Which of the Following Expenditures After Acquisition Would NOT Be