Financial Accounting

Learn the toughest concepts covered in your Financial Accounting class with step-by-step video tutorials and practice problems.

Long Lived Assets

Ordinary Repairs vs. Capital Improvements

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Ordinary Repairs vs. Capital Improvements

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Problem

Categorize the following repairs on a truck as a Capital Expenditure or Ordinary Expense:

1. Major engine overhaul:

2. Oil change:

3. Replacement of windshield:

4. Modification of the body of the truck:

5. Addition to storage capacity of the truck:

6. Paint job:

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Problem

Which of the following is not a capital expenditure?