Ordinary Repairs Should Be Recognized When Incurred as Revenue Expenditures

question 86

True/False

Ordinary repairs should be recognized when incurred as revenue expenditures.

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Definitions:

Service Capacity

The maximum level of service that can be provided by a company or infrastructure before needing expansion or upgrades.

Current Cost

The cost to replace an asset or inventory at current market prices, differing from historical cost which is the original cost at the time of purchase.

Historical Cost

An accounting principle that assets should be recorded and valued at their original purchase cost.

Future Sacrifice

An expected loss of economic benefits due to commitments or obligations a business has entered into.