On June 1, Puff's Trucking Company Paid $3,000 to Overhaul

question 136

Multiple Choice

On June 1, Puff's Trucking Company paid $3,000 to overhaul the engine on a delivery truck to allow it to be used for two additional years. It also paid $75 for an oil change on the truck. Which of the following statements is true?

• A) The $3,000 is a capital expenditure and the $75 is an expense.
• B) The $3,000 is an expense and the $75 is a capital expenditure.
• C) Both items are capital expenditures.
• D) Both items are expenses.