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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Normal repair and maintenance of an asset is an example of what?

a. Revenue expenditure

b. Capital expenditure

c. An expenditure that will be depreciated

d. An expenditure that should be avoided

To determine

Revenue Expenditure:

The expenditure which does not provide any increment in the benefit after it is incurred in the future to the company is known as revenue expenditure.

To select:

The correct option explaining the example of the expenditure.

Explanation

The revenue expenditure is the one which does not give any future benefits to the company and it includes the normal repair and maintenance of asset as normal repair does not going to provide any benefit in the future. Hence, the option (a) is correct.

The capital expenditure is the one which is capitalized which means it is for long term and going to provide future economic benefits to the business. Hence, the option (b) is not correct...

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