Why should the expenditures for repairs and maintenance correspond to the level of investment in capital equipment
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Why should the expenditures for repairs and maintenance correspond to the level of investment in capital equipment and to the age and condition of that equipment?
(a) Repairs and maintenance expense is calculated in the same manner as depreciation expense.
(b) Repairs and maintenance are depreciated over the remaining life of the assets involved.
(c) It is a generally accepted accounting principle that repairs and maintenance expense is generally between 5% and 10% of fixed assets.
(d) Inadequate repairs of equipment can impair the operating success of a business enterprise.
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Related Book For
Understanding Financial Statements
ISBN: 9780138114404
12th Edition
Authors: Lyn Fraser, Aileen Ormiston
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