Question Details

Which of the following is not a capital expenditure 



	1.	Which of the following is not a capital expenditure ?
a.	Repairs that maintain an asset in operating condition
b.	An addition
c.	A betterment
d.	A replacement

	P2.	In accounting for plant assets, which of the following outlays made subsequent to acquisition should be fully expensed in the period the expenditure is made?
a.	Expenditure made to increase the efficiency or effectiveness of an existing asset
b.	Expenditure made to extend the useful life of an existing asset beyond the time frame originally anticipated
c.	Expenditure made to maintain an existing asset so that it can function in the manner intended
d.	Expenditure made to add new asset services

	S3.	An expenditure made in connection with a machine being used by a company should be
a.	expensed immediately if it merely extends the useful life but does not improve the quality.
b.	expensed immediately if it merely improves the quality but does not extend the useful life.
c.	capitalized if it maintains the machine in normal operating condition.
d.	capitalized if it increases the quantity of units produced by the machine.

	4.	The sale of a depreciable asset resulting in a loss indicates that the proceeds from the sale were
a.	less than current fair value.
b.	greater than cost.
c.	greater than book value.
d.	less than book value.

	5.	Which of the following statements about involuntary conversions is false ?
a.	An involuntary conversion may result from condemnation or fire.
b.	The gain or loss from an involuntary conversion is reported in other income and expense on the income statement.
c.	The gain or loss from an involuntary conversion should not be recognized when the company reinvests in replacement assets.
d.	All of these.



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