Match the proper deduction method with the correct expenditures.
-Repair-and-maintenance expenditures
A)Capitalized and amortized over a number of accounting periods
B)Expensed in the period incurred
C)Not deductible
D)Can be capitalized and amortized or deductible depending on the amount of the expenditure

Question

Quizplus · Accepted Answer

Repair-and-maintenance expenditures are typically expensed in the period incurred, so the correct deduction method is B. Capitalizing and amortizing repair-and-maintenance expenditures is usually only done if the amount of the expenditure is significant and increases the useful life of the asset, so D is not applicable in most cases. Repair-and-maintenance expenditures are not considered capital expenditures, so they are not deductible under C.

Match the Proper Deduction Method with the Correct Expenditures