Exeter Corporation Purchased a Piece of Equipment with a Price

question 41

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.
-A state agency required that a pollution-control device be installed on the equipment at a cost of $5,000.

• 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:

Appointed

Selected or designated for a position or duty, often by an authority or through a formal process.

Reversible Error

A legal error at the trial court level that is significant enough to have affected the outcome of the case. It is grounds for reversal of the judgment on appeal.

Procedural Error

Mistakes made in the legal processes during a lawsuit or trial that can affect the outcome or fairness of the proceedings.

Litigation Error

A mistake or oversight that occurs during the legal process, possibly affecting the outcome of a trial or hearing.