Asked by Molly Walsh on Jul 21, 2024
Verified
Which of the following statements is incorrect?
A) Ordinary repairs and maintenance decrease net income.
B) Capital expenditures decrease assets.
C) Ordinary repairs and maintenance are recurring in nature.
D) Additions and improvements to a depreciable asset occur infrequently.
Capital Expenditures
Funds used by a company to acquire or upgrade physical assets such as equipment, property, or industrial buildings, to enhance future earnings.
Repairs and Maintenance
Expenditures made to restore or maintain the functionality and efficiency of an asset without extending its useful life significantly.
Net Income
The amount of money a company has earned during a specific period, after all deductions are made.
- Gain insight into the differences between capitalizing expenditures and recognizing expenses, and how these actions influence financial statements.
Verified Answer
Learning Objectives
- Gain insight into the differences between capitalizing expenditures and recognizing expenses, and how these actions influence financial statements.
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