Answered: Annuel maintenance costs related to its…

Annuel maintenance costs related to its machinery, $71,400 would be an expense in the period occured or would be capitalized and depreciated over the useful life of the asset?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 9MC: The estimated economic life of an asset is also known as ________. A. residual value B. book value...

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Question

Annuel maintenance costs related to its machinery, $71,400 would be an expense in the period occured or would be capitalized and depreciated over the useful life of the asset?

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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Correct Answer: Annual maintenance costs related to its machinery, $71,400 would be accounted for repairs and maintenance expenses in the period in which it occurred.

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