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. |
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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