Question

Which of the following expenditures should be recorded as an asset? Multiple Choice Maintenance that maintain current benefits. An addition which increases future benefit. Repairs that maintain current benefits. Unsuccessful legal defense of an intangible asset.

Answer 1

Answer:

The correct answer is letter "B": An addition which increases future benefit.

Explanation:

An asset is a resource of economic value. Individuals, companies, and countries expect their own assets to generate economic benefits both now and in the future. Assets may be tangible, such as machinery and land or intangible, including products such as a trademark, a mechanical formula or property rights.

The accounting term addition refers to the subsequent acquisition of a plant, property, or equipment. Therefore, they are to be considered as assets at the moment of recording them.