The Replacement of a Major Component Increased the Productive Capacity

question 39

Multiple Choice

The replacement of a major component increased the productive capacity of production equipment from 10 units per hour to 18 units per hour. The expenditure should be debited to:

• A) Repairs expense.
• B) Maintenance expense.
• C) Equipment.
• D) Gain from repairs

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Definitions:

Trade Balance

The difference in value between a country's imports and its exports over a certain period, indicating the balance of trade.

Current Account

The current account is a component of a country's balance of payments that includes the balance of trade, net primary income, and net income from abroad.

Capital Account

The capital account, in international economics, refers to part of a country's balance of payments that records all transactions involving the purchase or sale of assets.

Gold Standard

A monetary system in which the value of a country's currency is directly linked to a fixed amount of gold, allowing for the conversion of currency into a specified amount of gold.