If the Cost of Ordinary Repairs Is Capitalized as an Addition

question 73

Multiple Choice

If the cost of ordinary repairs is capitalized as an addition to the building account during the current year,

• A) net income for the current year will be understated.
• B) stockholders' equity at the end of the current year will be understated.
• C) total assets at the end of the current year will not be affected.
• D) total liabilities at the end of the current year will not be affected.

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Definitions:

Ectoderm

The outermost of the three primary layers in an embryo that develops into the nervous system and the skin, among other structures.

Germ Layer

One of the primary layers of cells formed during embryogenesis, from which all tissues and organs of an organism develop.

Pseudocoelom

A fluid-filled body cavity lying inside the external body covering but outside the innermost gut tube, found in some invertebrates.

Phylogeny

The evolutionary history and lineage of species or a particular group of organisms.