Fred Owns a Delivery Truck

question 70

Multiple Choice

Fred owns a delivery truck. Which of the following costs, associated with the truck, will be treated as a revenue expenditure?

• A)oil change and lubrication
• B)major engine overhaul
• C)modification for new use
• D)addition to storage capacity

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Definitions:

Square Feet

A unit of area measurement equivalent to a square that measures one foot on each side.

Direct Method

A way of preparing a cash flow statement where actual cash flow information from the company’s operations is used, directly showing cash receipts and cash disbursements.

Machine Hours

A measure of production output based on the amount of time machinery is operated.

Number Of Employees

The total count of individuals employed by a company or organization, either full-time or part-time.