Which of the following should not be treated as a revenue expenditure?
A)Delivery costs on newly purchased equipment
B)Annual fire insurance premiums on plant and equipment
C)Repair to an elevator of a five-year-old building
D)The purchase of a pencil sharpener for $10 used in an office

Question

Quizplus · Accepted Answer

Delivery costs on newly purchased equipment should not be treated as a revenue expenditure because they are part of the capital cost of acquiring an asset, and therefore should be capitalized and depreciated over the useful life of the equipment, not expensed immediately.

Which of the Following Should Not Be Treated as a Revenue