Accountıng Iı Deneme Sınavı Sorusu #975583

A company makes an expenditure for a building it owns, and this extends the useful life of the building. How will this company record this expenditure in the journal?


Debits to Repairs and Maintenance Expense account.

Records as an asset.

Records as a period expense.

 Records as an inventory.

Records as a depreciation.


Yanıt Açıklaması:

There are also some expenditures made for building and these expenditures yielded as extending the useful life of the asset and/or increasing the capacity of the asset. These kinds of expenditures must be capitalized. Capitalization means recording as an asset. In this context, if an expenditure extends the useful life and/or increases the capacity of an asset, it must be added to the cost of the related asset. The correct answer is B.

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