Exeter Corporation Purchased a Piece of Equipment with a Price

question 193

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.
-$3,000 freight costs were paid to ship the equipment from the manufacturer.

• 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:

Behavior

The actions or reactions of an individual or group in response to external or internal stimuli.

Replacement Hypothesis

A theory that suggests new members or elements within a system replace older ones, often in the context of social groups or ecological systems.

Therapist

A professional trained in the treatment of mental, emotional, and behavioral disorders, providing support and techniques to help individuals manage and overcome challenges.

Group

A collection of individuals who interact with one another, share similar characteristics, and collectively have a sense of unity.