I. The costs of uninsured hazards or claims for uninsured accidents during construction are regarded as administrative expense and never capitalized to the PPE item. II. Subsequent expenditures incurred to extend the asset's capacity or efficiency are generally accounted as revenue expenditures. Select the correct response: Only the 1st statement is correct. Both statements are correct. Only the 2nd statement is correct. Both statements are incorrect.

I. The costs of uninsured hazards or claims for uninsured accidents during construction are regarded as administrative expense and never capitalized to the PPE item. II. Subsequent expenditures incurred to extend the asset's capacity or efficiency are generally accounted as revenue expenditures. Select the correct response: Only the 1st statement is correct. Both statements are correct. Only the 2nd statement is correct. Both statements are incorrect.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

I. The costs of uninsured hazards or claims for uninsured accidents during construction are regarded as administrative expense and never
capitalized to the PPE item..
II. Subsequent expenditures incurred to extend the asset's capacity or efficiency are generally accounted as revenue expenditures.
Select the correct response:
Only the 1st statement is correct.
Both statements are correct.
Only the 2nd statement is correct.
Both statements are incorrect.

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