Replacing the Engine of a 3-Year-Old Vehicle Would Be an Example

question 44

Multiple Choice

Replacing the engine of a 3-year-old vehicle would be an example of a(n) :

• A) extraordinary repair.
• B) betterment.
• C) ordinary repair.
• D) capital expense.
• E) revenue expenditure.

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Definitions:

Accounts Payable

Obligations or debts a company owes to its suppliers or vendors for products or services received.

Direct Method

A costing methodology that directly assigns specific costs to relevant objects without using allocation for indirect costs.

Cost Of Goods Sold

Costs directly related to the goods a company sells, covering both the materials' cost and the labor cost involved in making the product.

Balance Sheet Accounts

These are the accounts that reflect the financial position of a business at a specific point in time, including assets, liabilities, and equity.