Question

In order for a cost to be capitalized (capital expenditure), the following must be present

A) Routine maintenance
B) Increase in useful life or productivity of an asset
C) Decrease in fair market value
D) Unrelated to any asset

Answer 1

In order for a cost to be capitalized, it must meet certain criteria such as not being associated with routine maintenance, resulting in an increase in useful life or productivity of an asset, being directly related to an asset, and not decreasing the fair market value of an asset.

Step-by-step explanation:

In order for a cost to be capitalized, it must meet certain criteria. These criteria include: