Exeter Corporation Purchased a Piece of Equipment with a Price

question 80

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.
-It was necessary for an architect to redesign the work space to accommodate the new equipment.A fee of $6,000 was paid.

• 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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High Inflation

A condition in the economy where the prices of goods and services rise rapidly, decreasing the purchasing power of money.

Lowering Dollar Value

The decrease in the purchasing power of the U.S. dollar compared to other currencies, which can affect international trade and domestic inflation.

U.S. Dollar

The official currency of the United States, recognized worldwide as a standard of monetary value.

World Economy

The global network of economic activities and transactions, encompassing all the economies of the world's nations and influencing international trade and finance.