Which of the Following Is Not True Regarding Expenditures for Improvements

question 82

Multiple Choice

Which of the following is not true regarding expenditures for improvements?

• A)Improvements are sometimes called betterments.
• B)Improvements may increase an asset's performance by increasing the service life.
• C)Improvements may increase an asset's performance by reducing the operating costs.
• D)Improvements may increase an asset's performance by increasing the rate of output.
• E)When the firm makes the expenditure for improvements, it recognizes the cost of the improvement by debiting the Improvement Expense account.

---

Definitions:

Shareholders

Individuals or entities that own one or more shares of stock in a public or private corporation, giving them partial ownership and usually voting rights.

Agency Theory

A theory explaining the relationship between principals, such as shareholders, and agents, such as company executives, and how to best align the interests of both parties.

Owners

The individuals or entities that legally possess an asset or property.