The Correct Statement Concerning Subsequent Costs Incurred in Relation to a Depreciable

question 51

Multiple Choice

The correct statement concerning subsequent costs incurred in relation to a depreciable asset after its original acquisition is:

• A) If the subsequent cost of replacing part of an item of equipment is added to the carrying amount of that asset then the carrying amount of the part that is replaced must be decommissioned.
• B) The replacement of the tyres on a motor would add to the expected life of the vehicle.
• C) The painting of a building would normally be considered an improvement and capitalised.
• D) Subsequent costs should nearly always be capitalised rather than charged to an expense account.

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Definitions:

Autism

A developmental disorder characterized by challenges with social interaction, communication, and by restricted and repetitive behavior.

Passive

Characterizing a lack of active response or action, often allowing others to dictate situations or outcomes.

Active

Engaging in physical movement or mental effort; not passive or stationary.

Nurture

The process of caring for and encouraging the growth or development of someone or something.