Which of the statements below regarding capital expenditures is TRUE?
A)Capital expenditures include those that make an asset last longer.
B)Capital expenditures maintain the operating condition of an asset.
C)Capital expenditures include ordinary repairs.
D)Capital expenditures decrease the carrying value of an asset.

Question

Quizplus · Accepted Answer

Capital expenditures are expenditures that are expected to generate benefits beyond the current accounting period, such as those that increase the useful life or operating capacity of an asset. This includes expenditures that make an asset last longer or improve its efficiency, whereas ordinary repairs are considered revenue expenditures.

Which of the Statements Below Regarding Capital Expenditures Is TRUE