Exeter Corporation Purchased a Piece of Equipment with a Price

question 136

Multiple Choice

Exeter Corporation purchased a piece of equipment with a price of $80,000 on March 1, 2018.The amounts below are related to the equipment purchase.Match the items below and explain why each revenue expenditure is not capitalized.
-Terms of the purchase were 2/10, net 30.Edison paid for the purchase on March 8.

• A)This item should be included as part of the cost of the equipment.
• B)This item should be considered a revenue expenditure.

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Definitions:

Genetic Factors

Elements within an organism's genes that can influence its traits and characteristics, including physical appearance, behavior, and susceptibility to diseases.

Collective Unconscious

A concept in Jungian psychology referring to the part of the unconscious mind that is shared among beings of the same species, consisting of inherited, universal themes.

Instinctual Satisfaction

The fulfillment of innate biological drives or needs, such as hunger or sexual desire.

Basically Good

A philosophical and psychological concept suggesting that human nature is fundamentally benevolent or positive.