Asked by Claudia Gonzalez on Jul 22, 2024
Verified
Which of the following would most likely not be recorded as ordinary repairs and maintenance?
A) Fixing a tear in the carpet in the sales department offices.
B) Mending a leaky roof.
C) Putting a hydraulic lift on a delivery truck,making it easier and quicker to deliver appliances.
D) Painting the exterior of the factory building.
Ordinary Repairs
Expenses for routine maintenance and repairs that maintain the efficient operation of an asset but do not materially extend its life or increase its value.
Hydraulic Lift
A system that uses a fluid-driven mechanism to lift or move objects, often utilized in various machinery and equipment.
- Comprehend the distinction between capitalization and expense recognition and their effects on financial records.
Verified Answer
SN
Shanza NawazJul 24, 2024
Final Answer :
C
Explanation :
Putting a hydraulic lift on a delivery truck would be considered a capital expenditure rather than ordinary repairs and maintenance. It is an improvement to the asset rather than just maintaining its existing condition. A, B, and D would all be recorded as ordinary repairs and maintenance.
Learning Objectives
- Comprehend the distinction between capitalization and expense recognition and their effects on financial records.