Expenditures made to extend an asset's life are called revenue expenditures. True False

Expenditures made to extend an asset's life are called revenue expenditures.

True False

Expert Solution

Expenditures made to extend an Asset's life are called revenue expenditures.

This is False.

Capital Expenditures:-

Expenditures which made to extend of useful life, expand or acquisition of an Asset are Called Capital Expenditures, they represent more investment of capital to expand or acquisition of long-term Assets. These Expenditures are not done on regular basis. These types of expenditures shows in Balance Sheet and Cash flow Statement. These are long-term expenditures.

Revenue Expenditures:-

Expenditures which made to meet the daily requirements of business to running production smoothly. These are Operational costs of a business to running day to day activities. Revenue Expenditures are short-term expenditures. These expenditures related to maintenance of Assets without extend their useful life. These expenditures shows in Income Statement. These expenditures related to repairing, maintenance or repainting expenses.

ekkarill92 answered 1 month ago

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