Exeter Corporation Purchased a Piece of Equipment with a Price

question 90

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.
-During the installation, the equipment was damaged and repair costs of $2,000 were incurred.

• 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:

Prefrontal Regions

Areas in the front part of the brain responsible for complex behaviors including planning, decision making, and moderating social behavior.

Impulses

Sudden, involuntary inclinations to act or respond in a particular way without conscious reasoning.

Paranoia

A mental condition characterized by delusions of persecution, unwarranted jealousy, or exaggerated self-importance, typically elaborated into an organized system.

Mental Illness

Conditions that affect a person's thinking, feeling, behavior, or mood, significantly impacting their ability to relate to others and function each day.