The expenditure incurred for changing the oil in the company's fleet of trucks is debited to which account?

• A. Maintenance Expense
• B. Accounts Payable
• C. Equipment
• D. Prepaid Insurance

Answer: (A)

Verified step by step guidance

1. Understand the nature of the expenditure: Changing the oil in the company's fleet of trucks is a routine maintenance activity, not a capital expenditure or an insurance-related cost.
2. Identify the correct account type: Routine maintenance costs are typically recorded as expenses because they do not enhance the value or extend the life of the asset significantly.
3. Determine the appropriate account: Maintenance Expense is the account used to record costs associated with maintaining assets, such as vehicles, in their current condition.
4. Exclude other options: Accounts Payable is a liability account used to record amounts owed to suppliers, Equipment is an asset account used for capital purchases, and Prepaid Insurance is an asset account for insurance paid in advance.
5. Conclude that the expenditure should be debited to the Maintenance Expense account, as it aligns with the nature of the cost incurred.