Non-Current Assets Flashcards
- Trentham transport purchases a new delivery truck for $70,000. The stamp and transfer duty is $3,000. The logo of the company is painted on the side of the truck for $1000. The truck registration is $700 and a 12 month accident insurance policy is $1,200. The truck undergoes safety testing for $350. What does Trentham Transport record as the cost of the new truck?
a. $75,200
b. $74,350
c. $75,350
d. $76,250
b. $74,350
- Replacement of worn gears out gears on factory machinery is an example of …
a. Revenue expenditure
b. Capital expenditure
a. Revenue Expenditure
- Painting the extierior of a buliding is an example of a …
a. Revenue expenditure
b. Capital expenditure
a. Revenue expenditure
What does a Capital expenditure do?
Extends assets useful life and or, increases its capacity or efficiency
What does a Revenue expenditure do?
Maintains the asset in it’s working order.
Or if it is a insignificant amount
Painting and lettering of a used truck upon acquistion of the truck is a:
a. Revenue Expenditure
b. Capital Expenditure
b. Capital Expenditure
Replacing a pentium chip with a core 2 Duo chip, Whihc increases productive capacity. No extention of useful life expected. This should be treated as:
a. Revenue expenditure
b. Capital expenditure
b. Capital expenditure
Overhaul of a truck motor. One-year extention in useful life is expected. This should be treated as a:
a. Revenue expenditure
b. Capital expenditure
b. Capital expenditure
Purchased a wastebasket for $30 is a…
a. Revenue expenditure
b. Capital expenditure
a. Revenure expenditure
Computer installation cost should be claisfiied as an…
Equipment cost
Driveway cost should be clasified as
land imporovements
Grading cost should be clasified as…
Land
It is preparing land for land improvements. Therefore is a land cost
Cost of lighting for a parking lot should be clasified as…
Land improvement
Insurance and frieght on eqiupment should be classified as…
Equipment
Cost of tearing down a warehouse on land just purcahsed should be classified as…
Land