Question

expenditures in curred to maintain an asset in good operating condition must be depreciated over the remaining useful life of the asset.

true or false

Answer 1

Expenditures incurred to maintain an asset in good operating condition must be depreciated over the remaining useful life of the asset.

Answer:- False

Explanation (As per GAAP):- Repairs and maintenance are expenses a business incurs to restore an asset to a previous operating condition or to keep an asset in its current operating condition. They are distinct from capital expenses used to purchase the asset. Under generally accepted accounting principles – GAAP – you must record repairs and maintenance expenses in your records and report them on your financial statements in the period in which they were incurred. It goes in the operating expenses section of your income statement.