Asked by Gaurab Dhakal on Jul 26, 2024
Verified
Betterments are:
A) Expenditures making a plant asset more efficient or productive.
B) Also called ordinary repairs.
C) Always increase an asset's life.
D) Revenue expenditures.
E) Credited against the asset account when incurred.
Betterments
Improvements made to a property or asset that increase its value or productivity.
Plant Asset
Plant asset is a long-term physical asset used in the production process of a company, such as machinery, buildings, and equipment.
Revenue Expenditures
Expenses that are directly matched with revenues for a specific period, typically affecting the income statement immediately.
- Understand the difference between capital expenditures (betterments) and revenue expenditures (repairs).
Verified Answer
MS
Mirela SaletovicJul 26, 2024
Final Answer :
A
Explanation :
Betterments are expenditures made to improve or enhance a plant asset's efficiency or productivity. These expenditures increase the asset's usefulness and may extend its life. They are distinguished from ordinary repairs, which are simply routine maintenance and upkeep of the asset. Betterments are capitalized and added to the asset account, rather than expensed immediately like revenue expenditures.
Learning Objectives
- Understand the difference between capital expenditures (betterments) and revenue expenditures (repairs).