Question

"An expenditure made in connection with a machine being used by a company to produce inventory should be expensed immediately if it improves the efficiency of the machine but does not extend the useful life." True OR False

Answer 1

Answer:

True

Explanation:

Efficiency related expenditures are more closely with day-to-day servicing of the machine. Such an expenditure just maintains machine's capacity to save the future economic benefits rather than improve its capacity.