Accounting for IGCSE & O level - Accounting Procedures (Section 17 - No. 3)
When a business replaces a roof, what would be the correct accounting treatment?
Expense the cost immediately as a revenue expenditure.
Capitalize the cost as a capital expenditure.
Allocate the cost over a year.
Record the cost in owner's equity.
Explanation
As it adds more value to the property, it should be capitalized.
Comments (0)
