Which of the Following Is/are Not True Regarding Repairs

question 20

Multiple Choice

Which of the following is/are not true regarding repairs?

• A)Repairs include routine costs such as for cleaning and adjusting.
• B)Repairs include the costs of restoring an asset's service potential after breakdowns or other damage.
• C)Repairs do not extend the estimated service life or increase its productive capacity of an asset beyond original expectations.
• D)U.S.GAAP and IFRS treat repair expenditures as expenses of the period when the firm makes the expenditure.
• E)Distinguishing repairs from maintenance is difficult but typically not necessary because expenditures for both are period expenses.

---

Definitions:

Cash Received

Cash received encompasses any inflow of cash to a business or individual, coming from various sources such as sales, loan proceeds, or investments.

Operations

The day-to-day activities involved in running a business, focusing on producing goods and services efficiently and effectively.

Cash Equivalents

Highly liquid investments that are usually reported with cash on the balance sheet.

Statement of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, divided into operating, investing, and financing activities.