For eaqch of the folowing expenditures, indiacte the type ofaccount in which the
ID: 2502247 • Letter: F
Question
For eaqch of the folowing expenditures, indiacte the type ofaccount in which the expenditure should be recorded. Explain youranswers. A. 15,000 annual cost of routine repair and maintenanceexpenditures for a fleet of delivery vehicles. B. 60,000 cost to develop a coal mine, from which an etimated1 million tons of coal can be extracted. C. 124,000 cost to replace the roof on a building. D. 70,000 cost of a radio and t.v. advertising campaignto introduce a new product line. E. 4,000 cost of grading and leveling land so that a buildingcan be constructed. For eaqch of the folowing expenditures, indiacte the type ofaccount in which the expenditure should be recorded. Explain youranswers. A. 15,000 annual cost of routine repair and maintenanceexpenditures for a fleet of delivery vehicles. B. 60,000 cost to develop a coal mine, from which an etimated1 million tons of coal can be extracted. C. 124,000 cost to replace the roof on a building. D. 70,000 cost of a radio and t.v. advertising campaignto introduce a new product line. E. 4,000 cost of grading and leveling land so that a buildingcan be constructed.Explanation / Answer
Number Type ofAccount Name ofAccount Reason A Expenditure Account Repairs & Maintenance The benefit of the expediture will last only for one year B Capital Account Development Cost The benefit of the expenditure will last throught the life of the company. C Capital Account Replacement Cost This cost is incurred in relationto a fixed asset the benefit of which will last for more than one year. D Capital Account Advertisement Cost This is like an intangible asset the benefit of which will last for a lot more than one year E Capital Account Building Account This cost is incurred in relationto a fixed asset the benefit of which will last for more than one year.
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