Which of the following costs would be classified as capital expenditure for a restaurant business?
A、A replacement for a broken window
B、Repainting the restaurant
C、An illuminated sign advertising the business name
D、Cleaning of the kitchen floors
A、A replacement for a broken window
B、Repainting the restaurant
C、An illuminated sign advertising the business name
D、Cleaning of the kitchen floors
【参考答案及解析】
An illuminated sign advertising the business name will provide long-term benefits for the business and is therefore a non-current asset, ie capital expenditure. A replacement for a broken window is a repair, so it is revenue expenditure. Repainting the restaurant is a repair and renewal expense so it would be likely to be treated as revenue expenditure. Cleaning of the kitchen floors is a maintenance cost and therefore is revenue expenditure
An illuminated sign advertising the business name will provide long-term benefits for the business and is therefore a non-current asset, ie capital expenditure. A replacement for a broken window is a repair, so it is revenue expenditure. Repainting the restaurant is a repair and renewal expense so it would be likely to be treated as revenue expenditure. Cleaning of the kitchen floors is a maintenance cost and therefore is revenue expenditure