Whitetree Company is reviewing its accounting policies for the year, especially

Question

Whitetree Company is reviewing its accounting policies for the year, especially as they relate to expenditures on fixed assets after the assets have been purchased. Required: Determine whether each of the following is a capital expenditure or a revenue expenditure. Ignore issues of materiality. Capital Expenditure Revenue Expenditure 1. Replaced and updated the antiquated, out of-date electrical system in building with a 2. Changed oil in company president's vehicle 3. Adding a re-writable CD ROM to existing computer 4. Overhaul the engine of a company's vehicle Clear Undo Help Next >> I don't know

Explanation / Answer

Capital expenditure entails long term benefits . thus the economic benefit is extended beyond a year it brings into existence a new asset 1) Capital expenditure 2) revenue expenditure 3) Capital expenditure 4) Capital expenditure

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